“We are actively looking for assets in the data space, cloud space, Salesforce space or the healthcare space…We are also looking for acquisitions in the low-code, no-code space, so these four or five areas are important for us,” Singh told PTI.
It is pertinent to mention that low-code and no-code are alternative app development methods that use intuitive, graphical interface and pre-configured templates to give users power and flexibility to create applications and automate processes without having to write line-after-line of codes.
The company is “very keen” on buyouts, but will not rush into it. Coforge is not under any pressure and if the valuations are not a match, the company will wait rather than overpay for an asset.
“Valuations should have come down. They have not because firms that are not able to grow organically, continue to buy growth,” he said.
On whether Coforge is hopeful of going ahead with an acquisition in FY2024, Singh said the company will most certainly like to, but will not do so under pressure, as its organic business is “in a good space”.
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“At this stage if we can’t do an acquisition, we will still do very well. But we want to do an acquisition and want to make sure it is right,” he added. The mid-sized IT company raced past the $1 billion revenue mark for the full year FY23, and rewarded its employees by gifting an Apple iPad to each of its 21,000-plus staff. It, however, reported nearly 45% year-on-year fall in its consolidated net profit for March quarter at about Rs 115 crore hurt by one time expenses.
The one-time expense pertained to the cost incurred by the company towards gifting Apple iPad to employees. The company has also made provision towards US listing plans, primarily on legal and banking expenses, and will take a call on timing of secondary ADR based on market conditions.
Meanwhile, the revenue for the just ended March 2023 quarter was $264.4 million or Rs 2,170 crore. This translated to growth of 24.5% in rupee terms and 13.8% in dollar terms year-on-year.
Amid a “tough” environment, for FY24, the firm issued an annual revenue growth guidance of 13 to 16% in constant currency terms. The demand, Singh said, is “nuanced” when it comes to areas like banking and insurance.
“It is more nuanced than headlines and analysts’ talk. Banking, insurance and travel see different things in play…the demand in banking and travel are like night and day,” the Coforge top boss said.
A case in point is the banking space, where the “run-the-bank” is facing pressure and cutbacks, while “change-the-bank” transformational deals are not seeing let up in demand.
“While the macro view in banking is that demand is under significant pressure, almost all of it is directed towards ‘run-the-bank’. For ‘change-the-bank’ there is still demand around compliance-related things, demand around security, and anything to do with banking player competing with fintech,” he said.
The demand in travel space is buoyant and in sharp contrast to how things are playing out in the banking domain.
“In travel, the demand is buoyant. The commitment and confidence that airlines and airports have around spending is significantly higher,” he pointed out.
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