Coforge Spent More Than A Fourth Of Q4 Profit On Celebratory iPads For Employees

Coforge Ltd. has gifted an Apple iPad to each of its more than 21,000 employees to celebrate its $1 billion annual revenue milestone. That cost more than a fourth of its Q4 profit.

The Noida-based information technology services firm clocked a profit before tax—before exceptional items of Rs 52.3 crore—of Rs 287.2 crore in the March quarter, according to an earnings fact sheet on the company's website. The company then spent Rs 80.3 crore, or 27.95% of its profit before tax, on buying Apple iPads for each of its employees.

In the fact sheet, it is mentioned as the "$1Bn Milestone celebration cost".

To be sure, companies do seek to reward employees for achieving certain milestones. These have traditionally been in the form of ESOPs, bonuses, or gifts in kind. For example, IT firm Tata Consultancy Services Ltd. awarded each employee one week’s salary for every year of service completed to mark its 10th anniversary of listing.

Coforge saw its revenue grow 15.6% over a year ago to $1,002 million in the fiscal ended March 31, 2023. In constant currency terms, it was up 22.4%. In rupee terms, it was up 24.6% year-on-year to Rs 8,014.6 crore.

In the March quarter:

• Revenue was up 5.56% at Rs 2,170 crore.

• Ebit was down 25.4% at Rs 223.8 crore.

• Ebit margin was 10.3% in Q4 vs. 14.6% in Q3.

• Net profit down 53.2% at Rs 138.1 crore.

"We believe that our performance during the quarter was marked by two key achievements. The first was a quarterly sequential dollar growth of 5.0%. The second major landmark has been the firm crossing the $1 billion revenue mark," Sudhir Singh, chief executive officer at Coforge, said in a statement that was posted on the company website. "Our performance heading into FY24 sets us up well to deliver robust growth."

For FY24, the company has pegged its annual revenue growth guidance at 13–16% in constant currency terms, while profitability is seen as similar to that achieved in FY23.