IT firm Coforge actively scouting for acquisition in data, cloud: CEO

IT company Coforge is actively seeking acquisitions in areas such as data, cloud, healthcare and the “no low code” space, according to its CEO Sudhir Singh.

The company is “in some conversations at the moment,” Singh said, adding that financial and cultural compatibility will be an important consideration.

“We’re actively looking for assets in the data space, the cloud space, the Salesforce space or the healthcare space…we’re also looking for acquisitions in the low-code, no-code space, so those four areas or All five are important to “us,” Singh told PTI.

It is worth noting that low code and no code are alternative methods of application development that use an intuitive graphical interface and pre-made templates to give users the power and flexibility to create applications and automate processes without having to write line after line of code.

The company is “very keen” on acquisitions, but won’t rush into it. Coforge is under no pressure, and if the valuations don’t match, the company will wait rather than overpay for the asset.

“Valuations should have fallen. They haven’t because companies that are unable to grow organically continue to buy growth,” he said.

On whether Coforge hopes to move forward with an acquisition in fiscal 2024, Singh said the company will certainly want to, but won’t do so under pressure, because its organic business is “in good space.”

“At this point if we can’t make an acquisition, we’ll still do a very good job. But we do want to make an acquisition and we want to make sure it’s right,” he added.

The mid-sized IT company crossed the $1 billion mark for the full fiscal year 23, and rewarded its employees by gifting an Apple iPad to each of its more than 21,000 employees. However, it reported a drop of nearly 45 per cent year on year in its consolidated net profit for the March quarter at around Rs 115 crore affected by one-time expenses.

One-time expense relates to the cost to the company of gifting the Apple iPad to employees. The company has also made provisions for US listing plans, particularly for legal and banking expenses, and will take a call on the timing of secondary ADRs based on market conditions.

Meanwhile, the revenue for the quarter just ended March 2023 was US$264.4 million or Rs.2,170 crore. This translates to a growth of 24.5 per cent in rupees and 13.8 per cent in dollars on an annual basis.

Amidst a “tough” environment, the company in fiscal 24 issued annual guidance for revenue growth of 13 to 16 percent in constant currency terms. Singh said demand is “accurate” when it comes to areas such as banking and insurance.

“It’s more nuanced than the headlines and analyst chatter. Banking, insurance and travel see different things at play… Demand in banking and travel is like night and day,” said the Coforge chief.

An example would be banking, where the Bank Manager is facing pressures and cutbacks, while the Bank changer’s transformative deals do not see a slowdown in demand.

“While the macro view in banks is that demand is under a lot of pressure, almost all of it is geared towards ‘running the bank.’ For ‘changing the bank,’ there is still demand around compliance stuff, demand around security, anything to do with To compete with a banking company with financial technology.

Demand for travel space is brisk and contrasts sharply with how things are in banking.

“Demand is high in travel. The commitment and confidence of airlines and airports about spending is significantly higher,” he noted.