Strong order booking, project ramp ups to keep Coforge revenue upbeat – News Air Insight

The stock of Coforge gained 4% on Monday morning following the mid-tier IT exporter’s stellar September quarter performance. The company reported strong sequential and year-on-year growth in revenue and profit accompanied by improved profitability. It also sustained the momentum in new deal wins. Given this, analysts have raised 12-month price targets by 7% on average.

The company reported $514 million worth of new deals for the September quarter on the top of $507 million worth of deals signed in the previous quarter. This was the fifth consecutive quarter where the total contract value (TCV) remained above $ 500 million. The 12-month executable order book at $1,635 million was also the highest so far, reflecting higher revenue visibility.

The top 10 client concentration in revenue has started inching up again after hitting a low of 28.4% at the end of March 2025. It rose to 30.8% in the September quarter from 29.3% in the prior quarter. This proportion has fallen significantly from over 40% seven years ago.

The company’s revenue grew by 4.5% sequentially to $462.1 million for the second quarter. It was significantly higher than the tier I peers for whom the growth remained below 3%. In rupee terms, revenue of Coforge rose by 8.1% to Rs3,985.7 crore while net profit grew by 18.4% to Rs375.8 crore from the quarter ago. The operating margin (EBIT margin) expanded by 260 basis points to 14%.

The 13-year, $1.6 billion deal that Coforge struck with the US based travel technology company Sabre Corporation in March 2025 started contributing to revenue from the September quarter.

The company has continued to be on a hiring spree despite recording lower employee attrition unlike the larger peers who reported a greater volatility on this front. For Coforge, the headcount expanded to 34,896 in the September quarter from 31,991 a year ago and 34,187 a quarter ago. The attrition rate was benign at 11.4%, a tad higher than 11.3% in the previous quarter.

“Company’s distinctive AI-led solutions, including proprietary platforms across automation and software engineering, fuel its ongoing enterprise transformation work and margin expansion,” noted IDBI Capital in a report. The broker has raised the FY26 earnings per share estimate by 2.3% and FY27 estimate by 5.2% while increasing the 12-month stock price target by 5% to Rs2,030.

According to Elara Capital, the outlook of the top verticals of banking, insurance and travel appears to be strong as clients continue to invest. The broking firm has raised earnings estimates by 4-7% for FY26 and FY27 while increasing the 12-month target price to Rs2,010 from Rs1,850. The stock was traded at Rs1,830.3 at the end of Monday’s session on the BSE.