Coforge expects organic growth to be robust in FY27

Bengaluru: Mid-tier IT services firm Coforge expects organic growth to be very robust in FY27 and beyond as well. In December last year, the company announced the acquisition of Silicon-based AI-native firm Encora and recently it officially announced the successful closure of its acquisition of Cigniti Technologies.

To a query on the contribution of acquired companies to its total revenue, the company's CEO and Executive Director Sudhir Singh told DH, "If you look at last year itself, we grew 29.2%. If I take out the acquired companies, we still grew more than 21%. So by a long stretch, almost most of the growth that we deliver every year is organic growth, not inorganic acquisition-led. And last year was the best example of that."

The company's Q4 FY26 revenue stood at Rs 4,450.4 crore, up 30% y-o-y. In FY26, the company's revenue stood at Rs 16,402.7 crore, up 35.9% y-o-y in INR terms, 29.2% y-o-y in USD terms. The company's revenue in FY25 stood at Rs 12,073.3 crore.

When asked about AI-driven pricing pressure, the CEO said there is always pressure on AI-driven pricing if it is an efficiency-based RFP (Request for Proposal), but there is next to no pressure on pricing of a deal if it is a transformation-based solution that is made.

At a press conference on Thursday, the CEO said, May month marks the beginning of his 10th year at Coforge. "We were a $400 million firm when we started nine years ago. We hope to close this, the 10th year of our turnaround story, with the firm having grown almost seven times in just 10 years. During these last nine years, we have, as a team, delivered a revenue CAGR of more than 21%, an EBIT CAGR of more than 24%, a PAT CAGR of more than 24%, and an EPS CAGR of more than 22%," he said, adding that the company is headed for an exceptionally good fiscal year 2027.

Of late, people in the IT industry are talking about AI deflation, as major IT firms reported 2-3% annual revenue reductions due to this.

Talking about it, the CEO said, "We believe that the true cost of AI code is an important concept to be understood in the context of the evolving AI landscape. The deflationary argument assumes that code generation is the entire job of a tech services firm. It is not. AI generated code is cheap to build, but it is expensive to maintain, secure, and own. Just like cloud migration 20 years back, agentic AI will also create a massive managed services layer. Once these systems are in production, someone has to monitor the models, someone has to retrain the agents, and someone has to ensure governance," he explained, adding this is a recurring high margin revenue stream for firms like Coforge that can and will seize it.

"Every AI advancement accelerates our growth. We are positioned for the near -term modernisation surge that the world has seen. We are also positioned for the medium -term agentic deployment wave, which is inevitable," he added.