Coforge breaks the billion barrier, offering intimacy at scale for needy customers

Coforge reported $264.4 million in quarterly revenue in its Q1 2023 earnings report, finally pushing it into the “triple comma club”—a landmark goal for emerging services providers each to earn their big revenue chops with the financial analysts.

Coforge joins the growing gaggle of mid-tier IT and business services providers to cross the $1 billion annual revenue mark. For enterprises searching for a service provider partner, particularly in banking and financial services, Coforge’s continued growth presents the opportunity for enterprise customers to develop a deeper and longer-term relationship with the expanding provider, benefitting from its “mid-tier” flexibility and newfound scale.

In fact, HFS is receiving more requests than ever from enterprise leaders to explore the emerging mid-tier group of providers as their frustration from a lack of intimacy and niche expertise from juggernaut providers boils over. In today’s market, enterprises want partners that care about their needs and have enough scale to be taken seriously for a long-term pivotal relationship.

Coforge’s ruthless three-industry focus has been a critical success driver

Coforge shifted its internal needle in 2017 with the appointment of Sudhir Singh as CEO and its rebranding from NIIT Technologies to Coforge, as it is known today. Coforge has more than doubled in size since Sudhir’s appointment. In a 2021 conversation with HFS CEO and Chief Analyst Phil Fersht, the Coforge CEO explained how the company focused on only a handful of industry verticals. Nearly three-quarters of Coforge’s revenue comes from banking and financial services (BFS); insurance; and travel, transport, and hospitality (TTH) (see Exhibit 1).

Exhibit 1: Almost three-quarters of Coforge’s revenue is from BFS, insurance, and TTH

Source: HFS Research, 2023

This was a risky strategy, especially in the depths of the pandemic when travel, transport, and hospitality essentially ground to a halt. However, the bet paid off. Coforge gained a deep understanding of industry-specific nuances and developed a catalog of focused solutions. In our candid conversations with Coforge’s enterprise clients, its ability to navigate complex, industry-specific challenges, particularly in the harshly regulated BFS sectors, was a continued topic of praise and a key growth driver.

But it wasn’t all organic growth—Coforge’s acquisition of SLK Global helped, too

Coforge received a nitro boost from its April 2021 acquisition of SLK Global. SLK Global is a business process transformation firm specializing in financial services, a good alignment for Coforge. Before the acquisition, SLK Global reported approximately $60 million in annual revenue, giving Coforge an instant revenue boost, a handful of new BFS and insurance clients, and a valuable US presence. Coforge also absorbed SLK Global’s 7,000 resources in Texas, India, and the Philippines, most boasting deep mortgage, cards, payments, and insurance expertise.

Coforge advises that the acquisition is already helping it win deals, including a $105 million contract from a European bank in Q3 2021 and several big deals amounting to approximately $90 million in Q4 2022.

The Bottom Line: Coforge’s continued growth means it benefits from scale while offering mid-tier flexibility, which could be an attractive proposition for enterprises.

Coforge has hit an important milestone, but the provider can deliver mid-tier agility and flexibility, make rapid decisions, and adjust to shifting client demands, all while providing the scale of some larger peers. That should excite enterprises, particularly BFS firms. However, it doesn’t come without risk. Rapid growth comes with pain points, so enterprises must ensure Coforge continues to deliver on its promise of mid-tier flexibility—maintaining talent attraction, and retention best practices, providing top-quality support services, and keeping its hands-on leadership approach—while balancing a growing client portfolio.