Coforge Shares Fall 5% After Q1 Profit Misses Estimates, Margin Contracts

Shares of Coforge Ltd. opened with sharp losses of up to 5% on intraday trade after the IT company reported its first-quarter earnings for the fiscal year ending March 2025.

Coforge shares trade at Rs. 1,756, which amounts to a fall of over 5% compared to yesterday's closing. Over a 12-month period, the stock has gained almost 40%.

The stock reaction comes on the back of Coforge's June quarter earnings, which witnessed profit rising 21% on a quarter-on-quarter basis to Rs 317 crore, slightly missing the analyst estimate of Rs 335 crore.

Revenue stood at Rs. 3,689 crore, amounting to a gain of 8.2% compared to the previous quarter.

• Revenue up 8.2% at Rs 3,689 crore versus Rs 3,410 crore (Bloomberg estimate: Rs 3,723 crore).

• EBIT rises 4% to Rs 418 crore versus Rs 402 crore (Estimate: Rs 503 crore).

• Margin at 11.3% versus 11.8% (Bloomberg estimate: 13.5%).

• Net profit up 22% to Rs 317 crore versus Rs 261 crore (Bloomberg estimate: Rs 335 crore).

In the wake of Coforge's June quarter earnings, Morgan Stanley remained 'Overweight' on the counter, with an unchanged target price of Rs. 1,880.

While revenue growth remained largely in line, the brokerage firm noted that both EBIT and margin ranked below estimates.

Morgan Stanley further noted that the executable order book grew $40 million on a quarter-on-quarter basis, missing expectations of $55 million.

In the post-earnings media call, Coforge management has retained high conviction in the Banking segment.

"Our confidence continues to be high of growth In Banking, which continues to grow on principles of simplicity," said Sudhir Singh, Managing Director at Coforge.