Coforge Q1 FY27 Results Analysis: Revenue Jumps 49%, Margin Misses Guidance

Coforge Ltd's Q1 FY27 numbers came in mixed, with revenue of Rs. 5,527.70 Cr (+49.20% YoY) and PAT growth of +63.40% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

COFORGE delivered strong revenue growth of 49% YoY aided by Encora acquisition, with organic growth of 23%. However, EBITDA margin at 19.14% missed the guided >20.5% floor, partly due to integration costs. Near-term focus is on margin recovery and realizing Encora synergies.

Key Investment Insights

Key Positives

• Revenue grew 49.2% YoY to Rs. 5,527.7 Cr, with organic growth of 23.4% YoY excluding Encora.
• PAT attributable to owners grew 63.4% YoY to Rs. 518.6 Cr, normalized PAT up 66.3% YoY.
• Segment EBIT margin of 15.96% held above the guided floor of 15.5%.
• Encora contributed Rs. 957.9 Cr revenue (17.3%) and Rs. 157.8 Cr PAT in the first two months.
• EMEA revenue grew 33.6% YoY, likely aided by the UK public sector deal ramp.

Risk Factors

• Consolidated EBITDA margin of 19.14% missed the guided FY27 floor of >20.5% by 136 bps.
• Finance costs doubled QoQ to Rs. 86.6 Cr due to debt drawn for Encora acquisition.
• Net FX loss surged to Rs. 65.3 Cr from Rs. 20.1 Cr YoY, pressuring earnings.
• RoW segment revenue declined 7.5% QoQ, reflecting India business portfolio closure.