Coforge Ltd Q2 FY27 Results Analysis: PAT Jumps 56.5%, Margins Miss Guidance
Coforge Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 6,171.00 Cr (+53.70% YoY) and PAT growth of +42.20% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 23, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 6,171.00 Cr (+53.70% YoY) |
| PAT (Q2) | Rs. 605.00 Cr (+42.20% YoY) |
| EBITDA margin | 18.20% (-70 bps YoY) |
| EPS (Q2) | Rs. 13.27 (+18.40% YoY) |
| Market cap | Rs. 84,199.49 Cr |
| CMP | Rs. 1,900.50 |
Quarter Snapshot
Revenue grew 53.7% YoY to Rs.6,171 Cr on the first full quarter of Encora consolidation, with PAT to owners up 56.5% YoY and normalized PAT up 52.0%. However, EBITDA margin of 18.20% and EBIT margin of 13.85% both fell below management's FY27 guidance (20.5-21% and ≥15.5%), and H1 FCF/PAT of 88.6% missed the 100%+ target, requiring 22.5-23% EBITDA margin in H2. Synergy realization (professional charges down to 12.1% of revenue), no integration costs from Q3, and the Q4 hedge tailwind are the key watch items for margin recovery.
Key Investment Insights
Key Positives
- Revenue grew 53.7% YoY to 61,708 Mn and 11.6% QoQ, with H1 FY27 revenue of 116,985 Mn up 51.5% YoY
- PAT attributable to owners grew 56.5% YoY to 5,881 Mn; normalized PAT grew 52.0% YoY to 6,470 Mn
- Americas revenue grew 67.7% YoY to 38,935 Mn with EBIT margin stable at 17.67%
- EMEA EBIT margin expanded 194 bps QoQ to 19.07% and 357 bps YoY
- Professional charges declined to 12.1% of revenue from 13.7% in Q2 FY26, consistent with the guided 40% G&A synergy from Encora
- Exchange losses declined to 465 Mn from 653 Mn in Q1, on track with guidance; hedge book closes by Q3 with ~$10 Mn earnings tailwind from Q4 FY27
- H1 free cash flow of 10,072 Mn (FCF/PAT 88.6%); net cash from operating activities of 10,811 Mn up from 7,873 Mn in H1 FY26
Risk Factors
- EBITDA margin of 18.20% (pre-exceptional) is 230 bps below the low end of the FY27 guidance range of 20.5-21%; H2 needs 22.5-23% to hit the full-year target
- EBIT margin of 13.85% (pre-exceptional) is below the ≥15.5% FY27 guidance; H2 requires 17.2%+
- ROW segment EBIT margin collapsed to 0.92% from 3.30% in Q1 and 4.34% YoY, with EBIT down 69.2% YoY
- Finance costs rose 164% YoY to 1,080 Mn on the $550 Mn acquisition term loan; net debt stands at 38,240 Mn
- H1 FCF/PAT of 88.6% is below the 100%+ FY27 guidance target due to a 10,226 Mn receivables build
- Impairment for trade receivables and contract assets rose to 705 Mn in H1 FY27 from 66 Mn in H1 FY26
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.