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 Sept. 30, according to an exchange filing on Tuesday. That compares with the Rs 2,713-crore consensus estimate of analysts tracked by Bloomberg.
Coforge Q2 FY25 Results Key Highlights (QoQ, Consolidated)
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Revenue up 27.6% at Rs 3,062 crore (Estimate: Rs 2,713 crore).
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EBIT up 35.8% at Rs 288 crore (Estimate: Rs 339 crore).
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EBIT margin up 60 basis points at 9.4% (Estimate: 12.5%).
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Net profit up 67.7% at Rs 234 crore (Estimate: Rs 246 crore).
One basis points is one-hundredth of a percentage point.
The board of the company has approved an interim dividend of Rs 19 per share. The record date for the payout is Oct. 11, 2024.
On May 2, Coforge proposed to acquire 54% stake in Cigniti Technologies Ltd. at Rs 1,415 crore, in a deal valued at $220 million. That, its Chief Executive Officer Sudhir Singh said, would help his company become a $2-billion 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 starting to show.
In July-September 2024, Coforge had 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 12-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. The quarterly results were declared after market hours.
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