Coforge Share Price Jumps 10% On Strong Deal Pipeline, Management Commentary
Coforge share price advanced 10% to Rs 9,051 apiece soon after the market opened.
Coforge Ltd.'s share price advanced 10% during early trade on Thursday after the management's commentary following its third-quarter earnings and a strong deal pipeline.
Net profit grew 6.6% sequentially to Rs 216 crore from Rs 202 crore.
Revenue from operations rose 8.4% from Rs 3,062 crore to Rs 3,318 crore. This, compared to the Bloomberg estimate of Rs 3,139 crore. On a year-on-year basis, income rose 42.8%.
On the operating side, earnings before interest and tax rose 9% to Rs 392 crore, compared to an estimate of Rs 382 crore. The EBIT margin was unchanged at 11.8%.
Coforge's order intake in the third quarter was $501 million, the second consecutive quarter of $500 million order intake. Four large deals were signed last quarter across North America and ASEAN. The order book executable over next 12 months stood at $1.36 billion at the end of the quarter, a 40% yearly growth.
During its post-earnings conference call, Coforge executives said demand for services is primarily driven by the travel, technology, and airline sectors.
Deal wins are expected to be strong going ahead looking at current pipeline, while insurance in aggregate will continue to grow, they said.
The EBIT margin for the quarter stood at 11.8%, with a 100 bps tailwind anticipated due to accounting adjustments, the company said. Looking ahead, Coforge expects its margin to expand to 13.5% by the third quarter of fiscal 2026.
The tailwinds for the next quarter will include reversals of furlough and operational efficiencies, executives said.
The board declared its third interim dividend of Rs 19 per share for the financial year 2025.
The company also announced that its wholly-owned overseas subsidiary Coforge Inc. will acquire US-based Xceltrait Inc. for around $17.85 million.
ALSO READ
Coforge, HPCL, United Spirits Among Stocks To Outperform Despite Q3 Results Misses, Says Jefferies
Coforge Share Price Up
Coforge share price advanced 10% to Rs 9,051 apiece soon after the market opened. The benchmark NSE Nifty 50 was down 0.2%.
The stock has risen 43% in the last 12 months. The total traded volume so far in the day stood at 17 times its 30-day average. The relative strength index was at 49.
Twenty-two out of the 35 analysts tracking Coforge have a 'buy' rating on the stock, three recommend a 'hold' and 10 suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price target of Rs 8,838 implies a potential upside of 1.5%.
