Coforge CEO Forecasts 14% EBIT Margin For FY26 Despite IT Sector Challenges

Coforge Ltd. expects to maintain an Ebit (earnings before interest and taxes) margin of 14% for FY26 despite persistent challenges in the IT sector. Speaking to NDTV Profit on Thursday, CEO Sudhir Singh attributed the company's confident growth outlook to strong deal closures, a growing signed order book and structural cost reductions.

“Regarding margins, specifically Ebit, we've been very clear. The numbers we’re discussing are Ebit margins, not Ebitda margins. Ebitda margins have jumped 61 basis points sequentially, and Ebit margin has also increased. Our clear guidance for the current year is that reported Ebit will reach 14% for Coforge in fiscal 2026,” Singh said.

He expressed confidence in sustained growth and margin expansion for the IT services company in the remaining quarters of the current fiscal. However, Singh acknowledged that peers across the industry were talking about “bleak macro” conditions for the sector in Q1FY26.

“Our confidence comes from our track record. And this isn’t a one- or two-year track record, or even three or four quarters. This is the ninth year in which the Coforge leadership team is delivering sustained and robust results. When most peers spoke of bleak macros, we closed five large deals. At the end of Q1, our next 12-month signed order book is 46.9% higher than the same time last year,” he added.

According to Singh, Coforge’s focus on hyper-specialisation in select industries, deep engineering capabilities and high execution intensity drives their optimistic outlook on growth.

“While we signed 14 large deals last fiscal, we are already operating at a run rate of signing 20 large deals currently. Our confidence comes from something we’ve always emphasised: an execution intensity uniquely our own. For eight years, we have been hyper-specialised in a select set of industries, focused on deep engineering capabilities, tied to our execution intensity,” he noted.

In its Q1FY26 financial results released on Wednesday, Coforge posted strong performance despite a slowdown in the IT sector. During the April-June quarter, Corforge posted an 8.2% increase in revenue at Rs 3,689 crore versus Rs 3,410 crore in Q4FY25. The IT firm’s Ebit rose 4% to Rs 418 crore versus Rs 402 crore during the March quarter. Its margins stood at 11.3% in Q1FY26 against 11.8% in the previous quarter. Meanwhile, the net profit rose 22% sequentially to Rs 317 crore versus Rs 261 crore in the preceding quarter.

Coforge’s Board of Directors also declared an interim dividend of Rs 4 per share for FY 2025-26. The company has set July 31 as the record date for the interim dividend payout.

Shares of Coforge were trading 8.19% lower at Rs 1,698.2 apiece on the NSE at 1:47 p.m., compared to the benchmark Nifty50 declining 0.54% to 25,084.6.