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Informist, Monday, Oct. 20, 2025

 

By Shakshi Jain

 

NEW DELHI – Mid-cap information technology company Coforge Ltd. is expected to report strong bottom-line and top-line growth for the September quarter, helped by the ramping up of large deals. The company is expected to turn in a sector-beating performance for the quarter, similar to its performance in the June quarter, as per analysts.

 

Coforge's consolidated bottom line for the reporting quarter is expected to rise 15% sequentially to INR 3.64 billion, according to the average of estimates from 13 brokerages. This would mean sequential growth of 34% on the company's adjusted net profit. On a year-on-year basis, Coforge's profit after tax is expected to jump 80% for the September quarter. The estimates for net profit range from a high of INR 4.83 billion by ICICI Securities Ltd. to a low of INR 2.88 billion by IDBI Capital Market Services Ltd.

 

The company's revenue for the September quarter is seen rising almost 11% sequentially and 33% on year to INR 40.82 billion. The highest estimate for revenue is INR 41.17 billion from IDBI Capital and the lowest is INR 39.90 billion from Indsec Securities and Finance Ltd. 

 

Ramping up of the company's largest deal, with Sabre Corp., and managed services deals won recently likely led revenue growth for the September quarter, Kotak Securities Ltd. said in an earnings-preview report. Growth in inorganic revenues is expected to be marginal for the reporting quarter, according to Equirus Securities Pvt. Ltd. In dollar terms, the company's revenue for the September quarter is expected to add up to $470.29 million, as per the average of estimates from 13 brokerages. The lowest estimate for revenue in dollar terms is $453 million by Nirmal Bang Equities Pvt. Ltd. and the highest is $500 million by Indsec Securities. For the June quarter, the company's revenue was $442 million.

 

The company is expected to report around 6% sequential growth in revenue in constant currency terms for the September quarter, according to a majority of analysts. This would be lower than the 8% sequential growth recorded in the trailing quarter.

 

"In terms of TCV (total contract value), Coforge has been reporting TCV of over US$500 million for 4 consecutive quarters now and we expect this trend to continue in 2QFY26 (Jul-Sep), as it has indicated that the deal momentum is expected to remain robust," Nirmal Bang Equities said.

 

Coforge aims to close 20 large deals this year as compared to 14 in FY25, Chief Executive Officer Sudhir Singh had said earlier this year. The company had signed five large deals in the June quarter.

 

MARGIN MOVEMENT

Coforge's earnings before interest and tax, or EBIT, margin is expected to improve by 45 basis points on quarter to 13.65% for the September quarter, according to the average of estimates from 10 brokerages. This is likely due to operational efficiencies and the depreciation of the rupee, analysts said.

 

HSBC Global Investment Research expects Coforge's capital expenditure to be high for the first half of the financial year on account of the recent data-centre deal won by the company. The company's free cash flow is likely to be negative for Apr-Sept, the brokerage said.

 

Coforge had reported a consolidated net profit of INR 3.17 billion for the trailing quarter on a revenue of INR 36.89 billion. In the September quarter a year ago, the company's consolidated net profit was INR 2.02 billion on a revenue of INR 30.62 billion.

 

Coforge will announce its September quarter earnings Friday. Investors will watch out for the management's commentary on hiring and attrition trends, the likely impact of furloughs on growth in the current quarter, recovery in discretionary spending by clients, and wage hikes expected in the current quarter. Details of progress towards the revenue target of $2 billion and expansion of 150-250 basis points in margin by FY27 will also be in focus. Investors will also await an update on the merger with Cigniti Technologies, brokerages said.

 

Monday, shares of Coforge ended at INR 1,747.40 on the National Stock Exchange, up 0.7% from Friday's close. The stock is down 5.5% since the company reported its June quarter results on Jul. 23.

 

Of the 17 research recommendations on the stock available with Informist, 16 have a "buy" rating while one has a "hold" rating. The average target price of the "buy" recommendations is INR 1,891.

 

Following are the Jul-Sept earnings estimates for Coforge from 13 brokerages in descending order of the net profit estimates:

 

Broking Firm	Net Sales (INR mln)	Net Profit (INR mln)	Revenue ($ mln)	EBIT margin (%)
ICICI Securities Ltd.	41,122	4,829	467.8	13.6
Nirmal Bang Equities Pvt. Ltd.	40,008	3,922	453	13.7
Nomura Equity Research	41,095	3,820	471	13.8
Motilal Oswal Financial Services Ltd.	41,116	3,779	471	14
Elara Securities (India) Pvt. Ltd.	40,726	3,707	467
JM Financial Institutional Securities Pvt. Ltd.	41,085	3,639	472
Equirus Securities Pvt. Ltd.	40,980	3,602	469	13.9
Nuvama Wealth Management Ltd.	40,901	3,518	470	13.6
Kotak Securities Ltd.	41,105	3,478	469	13.2
Emkay Global Financial Services Ltd.	40,744	3,432	465
Indsec Securities and Finance Ltd.	39,900	3,400	500	13.3
HSBC Global Research	40,726	3,368	467	13.8
IDBI Capital Market Services Ltd.	41,165	2,882	472	13.6
Average	40,821	3,644.31	470.29	13.65

 

End

 

US$1 = INR 87.92

 

Edited by Rajeev Pai

 

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