As major information technology (IT) firms negotiate a phase of low single-digit revenue growth for the second fiscal in a row, mid-tier services firm Coforge believes the industry is beginning to see a clear divide — those moving to the new tech landscape and those still holding on to legacy models.
“For the last three years, we've seen some of the legacy players talk about discretionary spend not being good. We obviously operate in the same market, under the same conditions. We've continued to grow, and we feel that in FY26, we will again see significant growth going forward,” Coforge chief executive officer Sudhir Singh told Moneycontrol.
Singh’s views on the business model shift echo those of HCLTech CEO C Vijayakumar and Infosys’ Salil Parekh who have said the traditional business model is ripe for disruption and time has run out for it.
The Noida-based company’s FY25 revenue grew 32 percent on-year to $1.45 billion in constant currency terms. To be sure, Coforge’s revenue base is much smaller than that of its large-cap peers.
Brokerage Kotak Institutional Equities expects the mid-tier pack to outperform larger companies on growth, “driven by a favourable revenue mix and lesser concern on deflationary risks from new technologies”.
Also read: Cyclical or Structural? IT majors' slowing growth in FY25 raises tough questions
The Third Wave
Singh said services industry has undergone three major transitions over the past two decades.
The first, in the early 2000s, was driven by offshoring and cost arbitrage. The second wave, which came after the 2008 financial crisis, saw a shift towards digital transformation and deeper client engagement.
The third and current shift is being propelled by emerging technologies, particularly artificial intelligence (AI). “We are in the middle of that transition. There are clear winners, and there are clear losers that are emerging,” Singh said.
Three of the five deals the company signed in the March quarter would not have materialised had the solution not been AI-led, the CEO said. “Leveraging AI is the big difference that is driving the significant difference in growth across organisations in today's real world,” he said.
He also believes that three main tactical levers are making the difference for the company.
First is Coforge’s sales team’s focus on proactive large deals instead of total contract value (TCV). “Our sales team is incentivised on a number of large deals as a metric, and therefore they are focused on wallet share expansion, not addressing discretionary spend only,” Singh said.
Second, the company focuses on execution, where after eight years, the execution muscle is “unmatched”.
Lastly, the company’s engineering capability is deeply embedded in the industries that it operates.
“Therefore, with this strategic shift underway, with these three tactical levers, FY26 will again be a stellar year for Coforge,” Singh added.
Also read: Rattled to the core: Indian IT on shaky wicket after Trump tariffs
Vendor consolidation deals
Coforge said it has emerged successfully across deal types, closing 14 large contracts over the year.
The deal wins span both traditional and next-gen IT services, from intelligent mainframe offloading and legacy modernisation to vendor consolidation deals, where it claims a 100 percent win rate.
“We won every deal where there was a vendor consolidation that was going on. And then there are, of course, a significant number of proactive proposals, which are winning,” Singh said.
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Coforge won 14 large deals in FY25, with the record order intake of $3.5 billion. In Q4, order intake stood at $2.1 billion, including a 13-year product delivery and AI solutions deal worth $1.56 billion with US-based travel technology firm Sabre Technologies.
The company is also seeing traction in areas such as hyper-personalisation, fraud prevention, and “one order-one offer” solutions.
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