Coforge Focuses on AI-Driven Platforms, Rules Out Repeat of Data Centre Capex

Intelligent automation now contributes about 8% to Coforge’s revenue, says CEO Sudhir Singh

Coforge CEO Sudhir Singh has confirmed that the company will not repeat the data centre capital expenditure (capex) it made in the previous quarter, even as larger Indian IT players ramp up investments in AI infrastructure.

The company had earlier spent $85 million in Q1 FY26, with $62 million directed towards setting up an AI data centre. Singh clarified that this was a one-time investment, not part of a long-term strategy to enter the compute or hosting business.

> “We are not doing anything else in the data centre. We just did it for one quarter. That’s it,” Singh told Moneycontrol. “This quarter again, there has been no capex, and we do not see ourselves doing any further capital expenditure in that space.”



The earlier move had drawn a negative market reaction, with Coforge shares dropping over 9% following the announcement.

While companies like TCS have announced large-scale AI data centre investments to meet growing enterprise demand, Coforge is taking a different route — focusing on an asset-light, AI engineering model that emphasizes software and integration capabilities rather than physical infrastructure.


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Shift to Proprietary AI Platforms

Instead of expanding infrastructure, Coforge is doubling down on its proprietary AI platforms.
Key offerings include:

CodeInsightAI – for software reverse engineering

BlueSwan – for automation and orchestration

Forge-X – for managing large-scale transformation programs


These platforms are now deeply integrated into client delivery and are helping the company differentiate in large deals.
According to Singh, Coforge has successfully moved clients from pilot AI experiments to full-scale adoption, with intelligent automation now contributing roughly 8% of total revenue.


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Growth and Margins on the Rise

Coforge continues to outpace most mid- and large-cap IT peers, having grown 31% in FY25.
In the first half of FY26, the company has maintained a strong growth rate of 26–27%, even without acquisitions.

This momentum, coupled with operating leverage and a solution-led sales approach, has helped Coforge improve its operating margins by around 250 basis points sequentially.


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Strategic Outlook

Looking ahead, Coforge aims to:

Scale its AI-led engineering services

Deepen engagement with large enterprise accounts

Maintain an asset-light delivery model


Singh emphasized that Coforge’s long-term value creation will stem from AI platforms and engineering expertise, not from owning data centre capacity.

As of October 28, 2025, Coforge shares closed at ₹1,810 on the NSE, down 1.13% from the previous session.