Coforge CEO and Executive Director Sudhir Singh has expressed strong confidence in the IT services company's ability to maintain robust growth momentum throughout fiscal year 2027. This optimistic outlook is underpinned by substantial deal wins, a record-high order book, and the successful integration of its recent acquisition, Encora.
Singh characterized the June quarter (Q1FY27) as an "exceptional quarter" for Coforge. Even after divesting certain businesses, the company reported an impressive 5.2 percent sequential revenue growth in constant currency terms for the quarter.
Strong Financial Performance in Q1FY27
Coforge's Q1FY27 results showcased significant financial gains:
- Consolidated revenue surged by 49 percent year-on-year to Rs 5,527.7 crore.
- Revenue in US dollar terms increased by 33 percent.
- EBITDA jumped 74 percent year-on-year to Rs 1,123.3 crore.
- EBITDA margin expanded to 20.3 percent from 17.5 percent in the prior year.
- EBIT margin stood at 16 percent, surpassing the company's full-year guidance of 15.5 percent.
- Net profit more than doubled, rising 110 percent year-on-year to Rs 518.6 crore.
The company also reported a record next-12-month signed order book of $2.23 billion, marking a 27 percent sequential increase and a 44 percent year-on-year rise. Order intake for the quarter reached $691 million.
Encora Integration Ahead of Schedule
A key driver of Coforge's improved performance and future outlook is the integration of Encora, an acquisition completed earlier in the year. Singh highlighted that the integration is progressing ahead of schedule, aligning with Coforge's unique playbook.
"We take complete and immediate control on day one. We have already extracted out 40 per cent of the G&A cost of Encora," Singh stated, emphasizing the effectiveness of their integration strategy.
These early cost savings are expected to provide further efficiencies in the coming quarters. More importantly, Encora is projected to mirror Coforge's growth profile and become earnings per share (EPS) accretive within FY27, despite the associated financing costs.
Robust Order Book and Large Deal Pipeline
Coforge's substantial order book provides clear visibility for sustained growth. The $2.23 billion next-12-month signed order book, combined with strong deal wins already secured in Q2, gives management significant comfort regarding the company's robust growth trajectory.
Singh also revealed an optimistic forecast for large deal closures in the current quarter:
"We said that the quarter that has started, which is quarter two right now, is likely to be the quarter in which we will close the highest number of large deals in the history of the firm."
These significant deals are primarily expected from North America and Europe, further strengthening Coforge's revenue visibility for the remainder of FY27. With strong organic growth, a record order book, expanding margins, and the early success of the Encora integration, Coforge is well-positioned for another year of strong performance in FY27.