Coforge eyes 4x growth in 4 years, as stock crashes 10% in a day

livemint.com:

Coforge Ltd, has a long-term target to be among the top five of India’s $254-billion tech outsourcing industry. To do this, the company will look to ramp-up its latest acquisition of artificial intelligence (AI) and tech services firm, Cigniti Ltd—and could also pursue further acquisitions going forward. In the process, reaching an annualized revenue of $4 billion within the next four fiscals is possible, chief executive Sudhir Singh told Mint.

“A revenue of $2 billion is less than three years away. A growth of 18% means that we’ll double our revenue in four years," he said. Even organically, growing at a rate similar to the one in the past seven years, should mean that the company reaches an annual revenue of $4 billion in less than four years.

With acquisitions along the way, “$5 billion in annual revenue is not in the distant future," he said. While future acquisitions will be smaller than Cigniti, a combined growth of $4 billion in revenue should be possible for Coforge in the next four fiscals. "Eventually, growing beyond $6 billion in annual revenue is our goal," he added.

A senior analyst at a Mumbai-based brokerage, who requested anonymity, said that a projection of quadrupling revenue within four fiscals is “very steep by all estimates." “Unless Coforge makes a huge acquisition out of the blue, organically growing to $4 billion in revenue within four years seems to be a very tall ambition. The acquisition is unlikely to add such fillip," she said. The analyst was also sceptical about the Cigniti acquisition.