Analyst Concall
Coforge expects robust growth FY26 despite macro headwinds
This story was originally published at 21:29 IST on 5 May 2025
Register to read our real-time news.Informist, Monday, May. 5, 2025
Please click here to read all liners published on this story
--Coforge: Expect robust growth FY26 despite macroeconomic uncertainty
--CONTEXT: Comments by Coforge's mgmt in post-earnings call with analysts
--Coforge: Expect growth in FY26 to come from multiple quadrants
--Coforge: Travel industry may be mixed bag in near term
--Coforge: Travel industry taking cautious approach in expansion plans
--Coforge: Demand outlook has worsened for travel industry
--Coforge: No wage hike in Apr-Jun, last one was in Jul-Sept
--Coforge: Expect more headcount addition in coming qtrs
--Coforge: Sabre deal ramp-up to take place over three quarters
--Coforge: See no impact on co's organic growth FY26 from macro headwinds
--Coforge: Strong growth outlook FY26 factors in IT industry demand downturn
By Arya S. Biju
MUMBAI – Information technology company Coforge Ltd. expects robust growth in 2025-26 (Apr-Mar), despite the macroeconomic uncertainty, demand downturn in the IT industry, and near-term weakness expected in the travel segment, the company's management said in a post-earnings analyst call. It does not expect any macroeconomic headwinds to impact its organic growth in FY26, and expects it to be better than in FY25.
The guidance for robust growth in FY26 is after factoring in the demand downturn in the industry and the current macroeconomic condition, the company's management said. The outlook is based on the deal bookings in hand, sales pipeline and demand from existing accounts in the travel vertical, the company said. For FY25, the company reported a consolidated revenue of INR 120.51 billion, up nearly 34% on year. In constant currency terms, the revenue for the period was up over 32%. Its consolidated net profit for the period was INR 8.12 billion, up marginally from INR 8.08 billion reported a year ago.
With the change in geopolitics impacting the global economy, Coforge expects the travel industry to take a cautious approach in expanding capacity and sharing its outlook, especially in the US. "The airlines are part of the travel industry, so it's a mixed bag in the near term...while year-on-year reported travel bookings and revenue are higher for travel and hospitality, a number of companies have reported reduced velocity and there's a fear of booking cancellations in the near term," the management said. However, despite this, the company said it is seeing client opportunities in the travel segment in global capability centres, in modern airline retailing, in data modernisation, and in loyalty and personalisation.
During the March quarter, revenue from the company's top five clients fell to 18% of the total revenue from 19.8% the previous quarter. Revenue from the top 10 clients fell to 27.7% from 30% in the previous quarter. The company expects a rebound in growth in the top five and top 10 client segments in the coming quarters.
Asked about the drivers for growth and deals wins in FY26, the management said it expects growth in FY26 to come from multiple quadrants. However, the company will continue to focus on transformation and legacy modernisation deals. Irrespective of the demand downturn in the industry, Coforge remains confident that large deal velocity and median size will continue to grow. During the quarter under review, the company reported an order intake of $2.1 billion. As of Mar. 31, the company's 12-month executable order book stood at $1.5 billion, up nearly 48% on year. During the quarter, the company signed five large deals, including a $1.56-billion deal with Sabre Corp. Coforge expects the Sabre deal ramp-up to take place over three quarters.
The large deals signed in the latest quarter also included a $62-million deal with one of the top three clients of Cigniti. Coforge's board had approved the merger of listed Cigniti Technologies Ltd. with the company in December and had taken over the operations of Cigniti in July 2024. On the full integration of Cigniti, the company said it is currently with the Securities and Exchange Board of India. Coforge expects to complete the acquisition between December and January, after receiving the necessary approvals.
As of Mar. 31, the company had a total headcount of 33,497, up from 33,094 in the previous quarter. Coforge plans to expand this further in the coming quarters. However, it has no plans for a wage hike in the June quarter. Earlier, the company had announced a wage hike in the September quarter. It had also witnessed a fall in its 12-month attrition rate to 10.9% from 11.9% reported in the December quarter.
For the March quarter, the company reported a consolidated net profit of INR 2.61 billion, up over 21% on quarter. Its consolidated revenue for the quarter was up nearly 5% on quarter at INR 34.10 billion. Coforge announced its March quarter earnings after market hours Monday. Shares of the company closed at INR 7,496.50 on the National Stock Exchange, up 1.6% from the previous close. End
Edited by Avishek Dutta
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
