Coforge bets on large deals to drive growth despite macro challenges

Despite travel market weakness and global macroeconomic concerns, Coforge expects BFSI, insurance and Gen AI-led deals to sustain strong momentum in FY26

Mid-tier information technology (IT) services company Coforge is confident of carrying on the momentum in large deals in 2025-26 (FY26), even as it expects persistent macroeconomic headwinds to likely create some softness in certain businesses.

 

Deals worth at least $20 billion are up for renewal for the top-six IT services players this year and mid-tier companies will look to punch above their weight to grab a slice at a time when clients will be looking for vendor consolidation to rein in costs.

 

“We are 100 per cent confident. The large deal momentum will continue unimpaired, if not accelerate,” Coforge Chief Executive Officer (CEO) and Executive Director Sudhir Singh told Business Standard.

 

This year, he expects banking, financial services and insurance (BFSI) and health care to lead in large deals, unlike in FY25, which saw a record $1.56 billion deal with US travel and technology company Sabre. 

 

Coforge’s fresh order intake for the last year was $3.45 billion, up 75 per cent from the previous year. Executable order book for the next 12 months was $1.5 billion, up from $1.02 billion.

 

Travel business in North America and Europe, according to Singh, is likely to see contraction, with fewer people travelling this year amid economic uncertainties and tariff threats. However, this is likely to be offset by travel in Asia, which continues to be robust. Travel transportation and hospitality (TTH) contributed 18 per cent to the company’s top line last year.

 

“From a macro perspective, it will be bleaker in relative terms, but that is not where we operate. Spends continue to happen in BFSI in fraud management, mainframe offloading and AI (artificial intelligence) -based app management. Airlines will have to spend for the next decade to modernise their systems and airports will have to change themselves into retail malls for revenue. So, despite the macros, it is shaping up to be an exceptionally strong year,” Singh said.

 

A major chunk of the large deals are now being reshaped by generative AI (GenAI), where clients are looking for upfront savings and productivity gains being passed on to them. Even though this raises the concern of revenue cannibalisation, Singh has a different approach. “Your margins will fall in AI-based solutions, where you pass on productivity benefits if you actually cannot realise the benefits. Firms which come back and say that GenAI-based productivity savings are reducing margins are clearly not realising those benefits. If you can realise those benefits and pass on most of it, you build so much credibility with the client that you get more work in return,” he said.

 

According to analysts, enterprises will have to reduce cost, but, unlike in the past, they are not banking those savings as they need them to do business transformational programmes. For the IT service providers, it’s a new challenge of providing definitive savings upfront so that they are in a better position to win new-age deals from the same clients. 

 

For the full year, Coforge reported a revenue of ₹12,050 crore, which was up 32 per cent in constant currency. Its earnings before income, tax, depreciation and amortisation (Ebitda) margin for the March quarter was 16.9 per cent, up 134 basis points sequentially.