Coforge Ltd, formerly known as NIIT Technologies, has quietly but firmly set its sights on becoming a bigger force in the IT services landscape. In a bold move reminiscent of Cognizant Technology Solutions Corp and Infosys Ltd, Coforge is adopting a consulting-led approach to deepen client relationships and secure large, transformational deals.
A Strategic Shift Amidst a Cautious Market
The Noida-based company, now the seventh-largest IT services player in India, is placing business consultants directly at client locations. This strategic shift comes at a critical juncture: global technology spending is under pressure, and clients are tightening their budgets on non-essential initiatives. In this context, merely waiting for traditional request for proposals (RFPs) is no longer viable.
Instead, Coforge is proactively shaping opportunities. As analysts from Kotak Institutional Equities highlight, the firm’s solutions team is composed of business experts, not just technologists. These consultants embed themselves within client organizations, conduct workshops, understand operational challenges, and co-create tailored solutions. This hands-on, immersive approach helps Coforge pivot from a service vendor to a strategic partner — an evolution crucial for mining deeper business opportunities.
Following the Cognizant and Infosys Blueprint
Coforge’s strategy is not without precedent. Cognizant and Infosys had pioneered this approach nearly two decades ago when they realized that understanding a client’s business intimately could open doors beyond pure IT services. Cognizant, for instance, was once among the top recruiters from business schools globally, aggressively hiring MBAs to strengthen its consulting muscle. By 2014, it had a ratio of one MBA for every 20–25 technology professionals.
Infosys, too, had embarked on this journey, assembling a top-tier consulting team rather than growing through risky mergers and acquisitions. This shift enabled them to guide clients through digital transformations, helping them navigate emerging trends like analytics, social, mobile, and IoT.
These moves paid off handsomely. Cognizant’s revenues skyrocketed from $1.42 billion in 2006 to $14.81 billion in 2017, underlining the power of a business-centric consulting approach. Infosys similarly expanded its footprint, positioning itself as a transformation partner rather than a mere technology executor.
The Coforge Advantage: Deep Domain Expertise
Coforge is not new to this game. The company revealed it began investing in its Consulting and Solutioning division nearly eight years ago. Its early focus on niche segments such as Specialty Insurance, Buy-side Capital Markets, and Airlines allowed it to build functional expertise in carefully selected verticals.
Today, many of these functional consultants are positioned onsite at client locations in North America and Europe, working closely with business leaders. Coforge’s approach ensures these consultants are not merely advisory figures but are active partners in the client’s day-to-day transformation journey.
However, there’s a price to this approach. Hiring top-tier business consultants and MBAs comes with significant cost implications, squeezing margins. Coforge’s profitability has dropped to 13% in the last fiscal year, down from higher levels seen before FY22. Yet, as industry observers suggest, this trade-off is strategic: stronger client relationships often result in long-term revenue gains that far outweigh short-term profitability pressures.
Competing with the Big Five
Coforge’s ambition to breach the $2 billion revenue mark by FY27 places it in direct competition with industry giants like TCS, Infosys, HCLTech, Wipro, and Tech Mahindra. While these established players dominate the IT services market by sheer scale, Coforge’s boutique-style consulting-led approach allows it to punch above its weight.
Industry experts argue that this strategy helps IT firms evolve from vendors to trusted advisors. Such positioning enables companies to shape deals proactively and, in some cases, secure sole-source contracts without going through competitive RFP processes. This level of influence is invaluable, especially as clients grapple with rapid technological disruptions and regulatory shifts.
Leveraging Acquisitions to Build Scale
Coforge’s impressive 31.2% year-on-year growth in FY25, closing with $1.47 billion in revenue, has been bolstered by strategic acquisitions. The most significant was the purchase of a majority stake in Hyderabad-based engineering services firm Cigniti last May, Coforge’s largest acquisition to date. This move expanded its capabilities and client base, setting the stage for further growth.
Meanwhile, peers like Cognizant and Zensar Technologies are also actively mining existing clients for growth. Cognizant, for example, secured two mega deals exceeding $500 million in revenue by proactively presenting ideas and AI-led productivity improvements, rather than waiting for client-initiated RFPs.
The Right Time to Double Down on Consulting
The timing of Coforge’s renewed consulting push couldn’t be better. According to Ramkumar Ramamoorthy, partner at tech advisory firm Catalincs, investing in consulting capabilities is crucial during periods of technological upheaval and geopolitical uncertainty. Clients need guidance not only to survive but to pivot and thrive amidst shifting customer behavior, new regulations, and emerging technologies.
By investing in these capabilities now, Coforge positions itself as a long-term transformation partner — a move that could convert “tens-of-million-dollar” relationships into “hundreds-of-million-dollar” strategic partnerships.
Looking Ahead
Coforge’s adoption of a consulting-driven model is both a nod to proven industry playbooks and a bold statement of intent. While the road ahead involves challenges — from cost pressures to fierce competition with industry behemoths — the payoff could be substantial.
As the company edges closer to its $2 billion target, it will be fascinating to watch how this mid-sized challenger continues to carve out a space for itself among the industry’s giants, one deeply integrated client relationship at a time.
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This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.