Shares of IT services provider Coforge climbed 10 percent in Tuesday's trade following the announcement of robust financial results for the June quarter. The company's net profit more than doubled, increasing by 110 percent year-on-year to Rs 518.60 crore. This strong performance also saw its Q1 EBIT margin surpass the company's full-year guidance.
Revenue for the quarter saw a significant rise of 49 percent year-on-year, reaching Rs 5,527.70 crore. In dollar terms, revenue grew by 33 percent and net profit by 46 percent. The EBIT margin expanded by 414 basis points year-on-year, hitting 16 percent during the quarter.
Analyst Outlook and Share Performance
Following the impressive Q1 results, investment bank Morgan Stanley reiterated its 'Overweight' rating on Coforge stock, maintaining an unchanged target price of Rs 1,700, according to Bloomberg data. By 10 am, Coforge's shares had reached a high of Rs 1,674.70 on the BSE, marking a 9.56 percent increase, before paring some gains to trade around Rs 1,666.05, still up 9 percent.
Coforge CEO and Executive Director, Sudhir Singh, commented on the company's trajectory: “Our consolidated Q1 margins have come ahead of our annual margin guidance. The 414 bps YoY expansion in EBIT margin and 285 bps YoY expansion in Ebitda margin reflect the impact of AI infusion at scale in client delivery and internal operations. With the Encora acquisition completely operationally integrated and with strong demand, record visibility, and a rapidly expanding pipeline of AI-led opportunities, FY27 is shaping up to be an exceptional performance year for the firm.”
Singh highlighted a signed order book of $2.23 billion and an exceptionally strong pipeline of large deals. He also noted Coforge’s differentiated capabilities, with 86 percent of its revenues derived from AI-led engineering, data, and cloud services, positioning the firm to be an industry growth leader for the third consecutive year.
Interim Dividend Declared
In addition to the strong earnings, the Coforge board also declared an interim dividend of Rs 4 per share for the financial year 2026-27. August 3 has been set as the record date for determining the eligibility of shareholders for this interim dividend payment.