40% of our FY25 investments to be in AI: Coforge CEO Sudhir Singh

Indian IT solutions company Coforge aims to invest around 40 per cent of its technology capability, built for FY25, in artificial intelligence (AI). This will include AI-based innovations and solutions in the coming year.

“There are multiple technology capabilities that one can invest across. Whatever we are planning to invest next year by way of capability build-up, 40 per cent of that will only go to one space and that is AI,” said Sudhir Singh, chief executive officer (CEO), Coforge, in an interaction with Business Standard.

The Noida-headquartered company plans to invest in setting up new Cloud infrastructure and AI studio at its campus.

Singh also talked about the investments that the company is making related to AI training.

“There are very strong investments that we're making on the training front and we're trying to make sure that training gets contextualised. There will be different kinds of AI training that we will undertake, depending on the technology service line,” he said.

Coforge on Monday announced its results for the third quarter of FY24. It reported a 4.3 per cent year-on-year (Y-o-Y) increase in third-quarter profit, led by deal wins worth $354 million. All this was in a challenging macroeconomic environment.

Revenue during the third quarter was Rs 2,323.3 crore, up 13 per cent Y-o-Y.

Further, the earnings before interest, taxes, depreciation and amortisation (Ebitda) margins improved to 17.3 per cent quarter-on-quarter (Q-o-Q) by 201 basis points from the previous quarter.

“The macroeconomic conditions have been tough for the last four to five quarters and they are likely to continue going forward as well. There's really no respite at a macro level,” Singh said.

Despite the macro uncertainty, the company reiterated its revenue growth forecast between 13 and 16 per cent for financial year 2024-25.

“We’ve posted strong organic growth in the midst of the last three-four very tough quarters. We are confident that we will meet the revenue guidance that we've given because of our performance in the third quarter,” he added.

Unlike its larger peers, Coforge plans to hire ‘aggressively’ through the lateral as well as campus hiring programmes, said Singh.

He further said, “We believe our goal for this year and next year is growth. So, we will figure out a path to grow despite the macros being tough. And, in order to do that, we will have to keep hiring with speed to fulfil the requirements and it will continue at a robust level, going forward.”

Coforge’s total headcount at the end of Q3 FY24 was 24,607 and attrition was down to 12.1 per cent from 13 per cent in the earlier quarter.