Coforge Ltd, the mid-cap IT services major, reported its first quarter (Q1 FY26) results with net profit rising 22% year-on-year to ₹226 crore, slightly below street estimates of ₹234 crore. The company declared an interim dividend, demonstrating confidence in its future growth amid evolving global technology demand cycles.
Q1 FY26 Financial Highlights
The Noida-headquartered IT firm, known for its strong digital engineering and BFSI-focused services, posted:
| Particulars (₹ crore) | Q1 FY25 | Q1 FY26 | YoY Change (%) | QoQ Change (%) |
|---|---|---|---|---|
| Revenue | 2,110 | 2,420 | +14.7 | +4.3 |
| EBITDA | 398 | 455 | +14.3 | +3.8 |
| EBITDA Margin (%) | 18.9 | 18.8 | -10 bps | -20 bps |
| Net Profit | 185 | 226 | +22.2 | +5.1 |
| EPS (₹) | 29.4 | 35.8 | +21.7 | +5.0 |
Key Management Commentary
Sudhir Singh, CEO & Executive Director of Coforge, stated:
“Despite a challenging global macro environment, our sequential growth demonstrates the resilience of our portfolio. Our strong deal pipeline in insurance, travel, and BFSI verticals will drive H2 momentum.”
However, Singh acknowledged that near-term client discretionary spend remains muted, impacting revenue acceleration.
Dividend Declaration
The Board declared an interim dividend of ₹19 per share, continuing its shareholder-friendly capital allocation approach.
| Dividend Type | Amount (₹ per share) | Record Date |
|---|---|---|
| Interim | 19 | 31 July 2025 |
Coforge has consistently maintained a payout ratio of 40-45% over the past four years.
Deal Wins And Pipeline
During the quarter, Coforge reported:
- Total contract value (TCV) of $365 million, with three large deals across insurance, healthcare, and travel
- Net new order intake grew by 11% YoY, reflecting continued client confidence
- Strong traction in cloud modernisation, data engineering, and digital integration services
Business Segment Performance
| Segment | Revenue Share (%) | Key Highlights |
|---|---|---|
| BFSI | 42 | Secured two digital transformation deals with top US insurers |
| Travel & Transportation | 25 | Won large deal with European airline for tech upgrades |
| Healthcare | 18 | Focus on data interoperability and claims analytics |
| Others | 15 | Manufacturing and public sector engagements stable |
Geographic Revenue Breakdown
| Region | Revenue Share (%) | Growth Commentary |
|---|---|---|
| North America | 48 | BFSI and healthcare growth offset by delayed discretionary spends |
| Europe | 38 | Travel & transportation strong, banking sector cautious |
| Rest of World | 14 | Stable pipeline with new client additions |
Employee Metrics
| Metric | Q4 FY25 | Q1 FY26 | Change |
|---|---|---|---|
| Total Headcount | 26,920 | 27,120 | +200 |
| Attrition Rate (%) | 14.1 | 13.4 | -70 bps |
| Utilisation (%) | 80.3 | 80.5 | +20 bps |
The company continues to focus on fresher hiring and digital skill upskilling to maintain cost efficiencies and delivery agility.
Market Reaction
Despite the strong profit growth, Coforge shares fell by 2.1% to ₹5,155 as investors reacted to the slight miss in profit estimates and muted near-term guidance.
| Date | Closing Price (₹) | Change (%) |
|---|---|---|
| Jul 21, 2025 | 5,265 | — |
| Jul 22, 2025 | 5,155 | -2.1 |
Analyst Views
Brokerages largely retained their “Buy” ratings with minor target price adjustments.
- Motilal Oswal: “Coforge remains well positioned in mid-cap IT with consistent execution. Valuations remain attractive with growth visibility in FY26-FY27.”
- Nomura: “Near-term growth is impacted by discretionary spend cuts, but strong deal wins and vertical diversification will drive medium-term recovery.”
Future Outlook And Guidance
Coforge maintained its FY26 constant currency revenue growth guidance at 13-16% with EBITDA margin guidance of 19-20%. The company will continue:
- Investing in large deal pursuits
- Expanding its AI, data, and cloud offerings
- Strengthening nearshore delivery centres in North America and Europe to address client localisation demands
Recent Strategic Initiatives
- Launched Coforge Quasar, its AI-driven digital transformation platform integrating cloud-native accelerators
- Expanded Noida SEZ campus with a new 1,200-seater tower to support offshore delivery scale-up
- Partnered with Guidewire to strengthen digital insurance offerings globally
Peers’ Q1 Performance Comparison
| Company | Revenue Growth YoY (%) | Net Profit Growth YoY (%) | EBITDA Margin (%) |
|---|---|---|---|
| Coforge | +14.7 | +22.2 | 18.8 |
| LTI Mindtree | +11.2 | +9.4 | 16.4 |
| Mphasis | +9.0 | +8.1 | 15.5 |
| Persistent | +16.3 | +17.2 | 17.6 |
Conclusion
Coforge’s Q1 results underscore its resilient business model, strong deal pipeline, and steady expansion strategy, despite global macro uncertainties impacting discretionary tech spends. Its continued focus on BFSI, travel, and healthcare verticals, combined with investments in digital transformation platforms and AI, positions it strongly for medium-term growth. Investors will watch out for execution on large deals and margin management amid wage hikes in Q2.
Disclaimer
This news content is for informational purposes only. It is not intended as investment advice. Readers are advised to consult financial experts before making any business or investment decisions based on this report.
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