'AI is infra now': Coforge builds full-stack capability for real-world deployments

Sudhir Singh, CEO, Coforge

Mid-tier IT firm Coforge is betting on its artificial intelligence strategy by embedding infrastructure, data foundations and  AI for IT operations (AIOps) into its delivery model, moving beyond Gen AI pilots and proof-of-concepts.

“AI net projects are not just Gen AI-led, they need infrastructure, data foundation remediation and business and process operations technology,” chief executive officer Sudhir Singh told Moneycontrol in a post-earnings interaction.

Coforge shares tanked over 9 percent on July 24, as investors reacted to a combination of operating margin contraction, negative free cash flow and a spurt in capital expenditure. Of the $85 million spent in Q1, $62 million went toward building an AI data centre, Singh said.

Singh said the focus of Coforge is on long-term execution, and Q2 will again be exceptional. “This is not about just one quarter or one year, we believe our execution intensity, domain depth, and engineering backbone will continue to differentiate us,” he said.

Operational performance

The company reported 9.6 percent sequential growth in Q1FY26 in dollar terms and 56.5 percent YoY, signed five large deals, and pushed its 12-month order book to $1.55 billion, up 46.9 percent YoY. Coforge expects to close at least 20 large deals this fiscal against 14 in the previous year.

Still, Singh said the long-term strategy remains intact. “Real-world AI deployment requires more than Gen AI. It needs robust infrastructure, data readiness, and AIOps processes. As system integrators with engineering DNA, we’ve built assets from responsible AI frameworks to tooling for performance and auditability,” he said.

Adjusted margins were at 12.7 percent, below Street estimates and lower than the previous quarter. Free cash flow turned negative due to upfront investments, but Singh said Coforge is building long-term capability, not chasing quarterly optics.

Instead of focusing only on total contract value (TCV) or YoY growth, the firm tracks weekly submissions of large proactive proposals to measure sales effectiveness.

With enterprise clients now distinguishing between “run the enterprise” and “change the enterprise” AI spends, Coforge is betting on the latter for its pricing power and longer-term stickiness.