Coforge Q3 Results Review - Solid Performance; Outlook Confident For Medium Term: Dolat Capital

Coforge reported strong revenue growth of 3.7% QoQ in CC terms led by five large deal wins and robust order intake of $345 mn.

<div class="paragraphs"><p>Staff at office workspace. (Photo: Alex Kotliarskyi /Source Unsplash))</p></div>
Staff at office workspace. (Photo: Alex Kotliarskyi /Source Unsplash))

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Dolat Capital Report

Coforge Ltd. reported strong revenue growth of 3.7% QoQ (our estimate: 3%) in constant currency terms led by five large deal wins and robust order intake of $345 million (up 39.7% YoY).

Adjusted Ebitda margin up 10 basis points QoQ to 18.5% as improved offshoring, higher utilisation (up 300 bps), lower attrition and forex gains were largely offset by higher selling, general and administrative and hedged losses (down 60 bps).

Announced dividend per share of Rs 19.

For FY23, Coforge has upgraded revenue growth guidance to 22% plus in CC terms (versus 20% plus in Q2) and maintain Ebitda margin (before employee stock ownership plan) of 18.5%-19.0%.

Strong performance, guidance upgrade along with strong 12 months executable order book at $845 million (up 20% YoY) despite furloughs induced quarter suggest sustained hyper-traction in near-to-medium term, driving up earnings per share upgrade by 2.2%/4.4%/4.7% for FY23E/FY24E/FY25E.

Click on the attachment to read the full report:

Dolat Capital Coforge Q3FY23 Result Update.pdf
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