Coforge Q4 Results Review - Abstained Giving Growth Guidance; Acquisition To Be EPS Dilutive: Dolat Capital

Dolat Capital Report

Coforge Ltd. reported constant currency revenue growth of 1.9% QoQ (below our estimate: 2.3%) led by growth in banking and financial services. Deal win stood at $ 774 million taking TMF executable orders up 17% to $ 1 billion. Adjusted. Ebitda margin up 102 basis points QoQ to 19% (our estimate: 19.5%).

Management of Coforge refrained from providing revenue. Growth guidance owing to sustained uncertainties but expects adjusted. Ebitda margin expansion of 50 bps for FY25 flat on reported basis. We expect high single digit organic growth, while reported basis earnings may get slightly dilutive.

We have scaled down our FY25/FY26E earning per share estimate. (-5%/-3%) as we expect revenue growth inorganic as well as 12 million exec book growth led to get negated by increased amortization charges and equity dilution (~12%).

We upgrade to ‘Reduce’ rating earlier 'Sell' with target price of Rs 5,250 at 27 times FY26E.

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