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Motilal Oswal Report
Coforge Ltd. reported Q2 FY23 revenue growth of 6.2% QoQ in constant currency, ahead of our estimates of 5% QoQ CC. Reported U.S. dollar growth was 3.4% QoQ, led by banking, financial services (up 11.1% QoQ in U.D. dollar; 14% QoQ in CC).
It reported an order intake of $309 million, with 12-month executable order rising 16.6% YoY to $802 million. Ebitda margin (pre-restricted stock unit) of 18.4% (up 190 bps QoQ) recovered strongly and was 30 bps above our estimates.
The management reiterated its FY23E Ebitda margin guidance of 18.5-19.0%.
We see the good topline performance and continued momentum in deal wins as positive, and expect Coforge to deliver FY23E revenue growth of at least 20% YoY (ahead of its guidance) despite macroeconomic headwinds in H2 FY23.
We estimate it to report FY22-24 U.S. dollar revenue compound annual growth rate of ~13% despite a 550-700 bps cross-currency headwind.
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