Coforge Ltd remains confident it will more than double revenue and cross $5 billion well before its earlier target of FY30, dismissing concerns that artificial intelligence (AI) will slow the growth of India’s $300-billion tech services industry.
In an exclusive conversation with Mint on Friday, the chief executive of the country’s seventh-largest software services firm said the company remains open to acquisitions to meet its ambitions.
“Our intent will be to be $5 billion much before FY30. If that warrants acquisitions along the way, we will consider them, but at this point in time, the organic growth engine, which is doing extremely well and is trying to address the AI opportunity, is humming along very nicely,” said Sudhir Singh.
ended FY26 with $1.87 billion in revenue, up 29% on a yearly basis. This surge was largely driven by travel, transportation, and hospitality clients, which generate nearly a quarter of its revenue and form its second-largest business segment after banking and financial services.
Singh, who completes a decade at the top next May, is one of Indian IT’s longest-serving CEOs. Under his tenure, Coforge clocked 20% compound annual revenue growth, which is amongst the highest among the country’s tech services firms.
Noida-based Coforge expects business from legacy modernisation to help scale growth. This comes after the company completed its biggest acquisition in April — that of California-based IT firm Encora for about $2.35 billion.
To be sure, Coforge does not share how much of its revenue came from acquisitions. Still, management feels it could have done better. “What we could have done better, I suspect, is we could have grown even more than we have,” Singh said, adding that the company had done a “decent job” on that front.
According to Kotak Institutional Equities analysts, Coforge reported organic growth of 19.4% on a constant currency basis in FY26. The company did not outline its constant currency growth, which takes currency fluctuations into account.
Despite this optimism, Coforge risks falling behind in the sector rankings after ninth-ranked Persistent Systems Ltd announced its plan to acquire Nagarro in June. The combined entity’s projected of $2.9 billion would eclipse Coforge’s stated target of $2.5 billion by the end of the current fiscal year. Singh, however, declined to comment on competitors’ strategies.
Navigating AI shifts
For now, Singh brushed off concerns about AI-driven revenue loss, despite client expectations for upfront cost savings as automation reduces reliance on billable hours.
“As far as the deflation is concerned, in the short term, in the medium term, and in the long term, and we are on record as having said this, we do not see deflation in play,” said Singh, adding that deflation was only in the managed services portfolio.
He said the demand surrounding legacy modernisation was offsetting AI-led deflation and the firm was gaining market share from peers. “There is no limit, and when I say no limit, obviously this is hyperbole of sorts. But there is incredible demand for creating data pipelines, there is incredible demand for context engineering, there is significant demand that is emerging these days around remediation engineering,” Singh added.
“I just think the opportunity ahead of us, irrespective of the commentary around us, is so massive that the that pivot the fastest and make the promise of AI real for enterprises, will be operating in a context that is supply-constrained, not demand-constrained,” said Singh.
This optimistic outlook comes as IT services firms engage in a price war to secure contracts, with AI tools lowering entry barriers. While competitors are settling for thinner margins to win business, Coforge remains unconcerned, citing the nature and value of the deals it targets.
“We normally never acquire an asset if there’s anyone else bidding on it, and almost all the large deals that we sign are proactive large deals,” Singh said. He added that deals that are request-for-proposal (RPF)-led come with “acute pricing pressure in the market”, and that 19 of Coforge’s 21 large deals announced last year were proactive, helping insulate the company from pricing pressures.
Coforge’s operating margins jumped 370 basis points to 14.4% last year, which is more than peers like LTIMindtree (14.0%) and Mphasis (13.5%), while persistent market leaders such as TCS maintained higher levels around 24.5%.
Governance in focus
Corporate governance is also in focus after two shareholder proposals were voted down in under a year—an unprecedented setback for a top-10 IT firm.
The resistance stems from Coforge’s $2.35 billion acquisition of Encora, which initially granted Encora’s majority stakeholder, Advent International, the right to nominate members to key board committees, including audit, nomination, and remuneration. On 27 January, 31% of shareholders rejected these special rights. Within 14 hours, Coforge scrapped the clause, paving the way for the acquisition resolution to pass.
“We consult them (shareholders) very, very often. The resolution in January was approved with the modification done in consultation with the shareholders, and everything else, I think shareholders point us toward is something we align with,” said Singh. “As soon as we got the results, we had a conversation with our shareholders. It was borderline, the failure, and after that, I think it passed with an overwhelming majority.”
The second setback came a month ago when shareholders voted against re-appointing OP Bhatt to the board at the company’s annual general meeting on 24 August.
Singh said that clients are increasingly shifting toward outcome-based contracts, paying IT firms upon completion of specific tasks rather than for billable hours. This transition is fueling demand for specialized talent combining deep domain expertise with AI fluency.
He said the talent hired is not “necessarily the tenured, very senior consultants from McKinsey, BCG or Bain. These are folks with about five to seven years of total work experience across these firms and others who we hire, the value that we get in terms of the differentiation of the proposals that we put out and the credibility they help us build with our key clients more than offsets the cost”. He added that the company also hires forward-deployed engineers of about two years of experience in the US.