Coforge Q2 Results: Revenue Up By More Than A Fourth, Profit Surges 68%

Coforge Ltd. clocked growth that beat estimates in July-September 2024, as synergies from a critical acquisition started paying off.

Consolidated revenue from operations of the Noida-based IT services firm rose 27.6% over the previous three months to Rs 3,062 crore in the quarter ended 30 September, according to an exchange filing on Tuesday. That compares with the Rs 2,713-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue up 27.6% at Rs 3,062 crore (Estimate: Rs 2,713 crore).

• EBIT up 35.8% at Rs 288 crore (Estimate: Rs 339 crore).

• EBIT margin up 60 basis points at 9.4% (Estimate: 12.5%).

• Net profit up 67.7% at Rs 234 crore (Estimate: Rs 246 crore).

One basis point is one-hundredth of a percentage point.

The board of the company has approved an interim dividend of Rs 19/share. The record date for the payout is 11 October 2024.

On 2 May, Coforge proposed to acquire 54% stake in Cigniti Technologies Ltd. at Rs 1,415/share in a deal valued at $220 million. That, its Chief Executive Officer Sudhir Singh had said then, would help his company become a $2-billion revenue enterprise. India’s anti-trust regulator, the Competition Commission of India, approved the acquisition in June 2024. The deal was completed during the second quarter.

The synergies are already starting to show.

In July-September 2024, Coforge clocked an order intake of $516 million—its eleventh straight quarter of $300 million-plus deal wins. Thirteen new clients were added during the quarter. The headcount grew by 5,871 employees sequentially to 32,483, including 4,430 staff from Cigniti. Attrition, on a trailing twelve-month basis, is down 130 bps to 11.7%.

“The order book, which is now 40% higher year-on-year, gives us confidence that the quarters to come shall see robust and sustained growth,” Singh said in a statement accompanying the quarterly results. “The growth and margin expansion at Cigniti is a preview of sustained growth and margin expansion. We have fully integrated the Cigniti team and the synergies have exceeded even our expectations.”

On Tuesday, Coforge shares fell 0.41% to Rs 6,795.60 apiece on the BSE even as the benchmark Sensex ended the day 1.15% lower at 80,220.72 points. The quarterly results were declared after market hours.