Analyst Concall
Coforge expects Cigniti merger to be completed by Dec-Jan
This story was originally published at 21:03 IST on 24 October 2025
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--Coforge: Capex in Jul-Sept stood at $4 million
--CONTEXT: Coforge management's comments in post-earnings call with analysts
--Coforge: Focus on organic revenue growth as well as execution going ahead
--Coforge: Hold solid demand outlook for banking vertical
--Coforge: Expect Cigniti merger completion by Dec-Jan
--Coforge: To focus on growth over margins after achieving 14% EBIT margin
--Coforge: Expect significant furloughs like last few years in Q3
--Coforge: Wage hikes have had 100-150 bps impact on margins historically
--Coforge: Seeing no major change in tenure of deals signed recently
--Coforge: Deal with Sabre in steady state, expect no further ramp-ups
By Shakshi Jain and Simran Rede
MUMBAI – The much-awaited merger of Cigniti Technologies Ltd. with Coforge Ltd. is expected to be completed by Dec-Jan, a top company official told analysts during a post-earnings conference call Friday. "...the NCLT (National Company Law Tribunal) approval has been received and they asked us to convene creditors in a shareholders meeting," the executive told the analysts.
"The date is yet to come out, but as soon as the date is out, within 35 to 40 days... the meeting has to be convened," the executive continued. "After that, it will go back to NCLT for the second motion filing and then the merger will be completed. We expect that to be getting completed by either December, January timeframe."
After acquiring up to 54% stake in Cigniti Technologies last year, Coforge aims to acquire 100% stake in the company. According to the Coforge management, the acquisition has been advantageous for the company in not only bringing in large clients but also talent. "...the largest deal that we are pursuing today as we speak is a deal with a client that came into our client portfolio from Cigniti," the management said. "Two out of the top three clients of Cigniti that we acquired over the last five quarters, we've already signed large deals within that portfolio."
Earlier in the day, Coforge reported a strong set of results for the September quarter. The company's consolidated net profit for the three-month period rose just over 18% sequentially to INR 3.76 billion while the revenue grew 8% on quarter to INR 39.86 billion. The company's consolidated earnings before interest and tax, or EBIT, margin improved 251 basis points on quarter to 14%.
The company management said that if and when Coforge succeeds in clocking 14% in EBIT margin for the year, it will then prioritise growth over further margin expansion. "...if it expands, it expands. But the first imperative will be to prioritise growth and to keep investing in the business and be a very high-growth firm," the management said. "Fourteen per cent will be the minimum that we will plan to deliver."
Overall, the company aims to drive robust organic growth alongside acquisitions, as per the management.
Segment-wise, Coforge holds a positive view on the banking, financial services, and insurance sector with a rise in favourable conditions such as lower interest rates and shifts in regulatory practices. "We continue to believe that the demand outlook is improving on the margins," the management said. "It's not a vertical take-off, but it is improving on the margins."
In the healthcare segment, Coforge is eyeing a book of business of almost $100 million by the end of the current year. In the business segment that covers public-sector clients in international markets, the management said a $200-million run rate is likely in upcoming quarters. The book of business in this vertical has already crossed $150 million.
On the company's largest deal, with Sabre Corp., the management said it has reached a steady state and no further ramp-ups are expected. Coforge said it incurred capital expenditure of INR 4 million in the September quarter. The company's order book, executable over the next 12 months, stood at $1.64 billion as of Sept. 30, up nearly 6% on quarter and nearly 27% on year.
Answering a query on the sharp uptick in the order book executable over the next 12 months, the management clarified that it was not due to contraction in tenures of new deals. "...it is a function of the deals which were signed in the previous quarter and the current quarter and the ramp-up getting stabilised because of which you're seeing the pickup in the current quarter," it said.
For the current quarter, which is seasonally weak for the sector, the management said it expects furloughs at the same scale as in the past few years, "which have been significant". Coforge has also rolled out wage hikes for employees, effective Oct. 1, which may affect its margins for the quarter. Historically, wage hikes have had an impact of 100-150 basis points on margins, the management said.
Friday, shares of the company closed marginally higher at INR 1,760 on the National Stock Exchange. The company announced its earnings after market hours. End
US$1 = INR 87.84
Edited by Rajeev Pai
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