 "Sudhir Singh, chief executive officer and executive director of Coforge")
For Noida-headquartered Coforge, the recent acquisition of Cigniti Technologies will be a game changer, said chief executive officer (CEO) Sudhir Singh.
“We feel Cigniti will not be one of those acquisitions which are very good or excellent. But it will be an outright game changer for us,” Singh told Business Standard.
The board of Coforge, on May 2, approved the acquisition of a 54 per cent stake in Hyderabad-based Cigniti Technologies at a per share price of Rs 1,415.
Coforge expects the acquisition to propel it to become a $2-billion revenue company by FY27 and also improve margins by 150-200 basis points (bps).
The acquisition, according to Singh, will allow Coforge to create three new verticals — a $100-million vertical in retail and $250-million verticals each in healthcare and high-tech domains.
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Further, Cigniti’s existing presence in the western part of the US market will allow the merged entity to expand. Coforge has been trying for three years, he added.
“Cigniti is focused very sharply on emerging areas, including artificial intelligence (AI). We want to set up, working with Cigniti, a 10th service line for Coforge. This will be an assurance service for AI, which is a wide area for us to work in,” said Singh.
Coforge announced its fourth quarter results for FY24 on Thursday.
It reported a 94.8 per cent year-on-year (Y-o-Y) increase in fourth quarter net profit, which stood at Rs 223.7 crore. It was led by deal wins worth $ 774 million in the quarter.
Acknowledging the challenging macroeconomic conditions, Singh said there were visible green shoots in the year ahead and the firm was optimistic about growth opportunities in FY25.
“We are seeing clear green shoots in FY25 on the demand side. Quarter four has been a fantastic quarter for us and we've closed the year with a $2-billion order intake. We feel really solid about the fact that FY25 will be another robust growth year in light of all this,” said Singh.
The firm, post the Q3 FY24 earnings call, said it will be doing 40 per cent of its incremental investments in Generative AI (GenAI).
On similar lines, Singh had said the firm has set a target of training 40 per cent of its workforce in GenAI by the end of the current financial year.
He further said, “There is no service line, which will not be AI influenced. So, in the longer term, the intent is to train 100 per cent of our workforce in GenAI capabilities. Initially, the aim will be to scale it to 50 per cent.”
Shares of Coforge fell 10 per cent during the trading session on Friday after the company announced its earnings for the last quarter of FY24.
