New Delhi, May 7 (PTI) IT firm Coforge on Thursday said even though the rapid adoption of artificial intelligence is disrupting the traditional “labour-as-a- default” model, it will not shrink the IT services
industry.
Coforge has reported doubling of consolidated net profit in March quarter at Rs 612.3 crore. Revenue from operations grew 30 per cent to Rs 4,450.4 crore from Rs 3,422.2 crore a year ago.
Chief Executive Officer and Executive Director Sudhir Singh, during the company’s Q4 earnings call, said the rapid adoption of AI is disrupting the traditional “labour-as-a-default” model in the tech services industry, but it is also creating a massive new high-margin pipeline.
He pointed to the “true cost of code”, noting that while AI-generated code is cheap to build, it is expensive to maintain, secure, and own.
“Just like cloud migration 20 years back, agent AI will also create a massive managed services line. Once these systems are in production, someone has to monitor the models, retrain the agents, and ensure governance,” Singh explained.
He noted that macroeconomic tailwinds on the demand side are “structural and pure”, driven by a near-term modernisation surge and a medium-term AI agent deployment wave.
“While investors are concerned about the impact of AI on tech services, we believe AI is rapidly creating new value pools for the industry and unlocking a USD 160-180 billion market opportunity growing at 35 per cent to hit USD 800 billion in the next 5 years,” Coforge said in the investor presentation.
AI-led efficiencies provide a path for further margin expansion in FY27, Coforge said.
The company, which made AI investments worth USD 5.5 million in FY26, said AI is acting as a lever for both revenue growth and margin expansion, reflected in a strong share of AI-attributed revenue and rapid growth in AI Total Contract Value (TCV) bookings.
In full fiscal year FY26, Coforge’s net profit almost doubled to Rs 1,555.7 crore as compared to FY25, primarily due to gains from the sale of a stake in Coforge Advantage Go in May 2025.
Revenue from operations stood 35.8 per cent higher at Rs 16,402.7 crore during the fiscal.
“With an order executable of USD 1.75 billion, we enter FY27 with strong momentum and confidence. We expect to deliver robust revenue growth in FY27 and plan to deliver an EBITDA of more than 20.5 per cent on a consolidated basis in FY27,” Singh said. PTI ANK ANK ANU ANU
