Coforge says AI can lift margins despite pricing pressure
Coforge CEO Sudhir Singh discussed how AI is reshaping IT services economics, a $1.04 billion order intake and a raised margin outlook.
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what happened
According to Moody's, Coforge CEO Sudhir Singh told analysts on the Q2 FY27 earnings call that artificial intelligence is changing the economics of IT services. The company wants to move away from effort-based contracts and build projects around business outcomes. Singh said automation can help protect profitability even as pricing pressure intensifies.
In the September quarter, order intake reached $1.04 billion and the company signed eight large deals, the highest number in a single quarter for it. Organic constant-currency revenue grew 3.8% sequentially, and the reported EBIT margin stood at 16%. The FY27 consolidated EBIT margin guidance was raised to 16% from 15.5%.
CFO Saurabh Goyal said AI-led efficiencies in fixed-price contracts would begin to show in Q4 margin numbers.
why it matters
For the IT services sector, this suggests margin gains may increasingly depend on AI rather than scale alone. The next quarters will show how quickly the order pipeline turns into revenue.
market impact
IT services stocks: margins and AI efficiency become a key valuation factor for the sector.
tags
instruments
sources
- AI Automation Can Lift Margins Despite Pricing Pressure: Coforge CEO — Moody's, 24 October 2026 at 03:46 UTC
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