Strong order booking, project increases to maintain Coforge’s turnover

Shares of Coforge rose 4% on Monday morning following the mid-sized IT exporter’s stellar performance in the September quarter. The company reported strong sequential and year-on-year growth in sales and profits, accompanied by improved profitability. It also supported momentum in winning new deals. Against this backdrop, analysts have increased their 12-month price targets by an average of 7%.

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

Sales concentration in the top 10 customers has started to increase again, after reaching a low of 28.4% at the end of March 2025. This increased from 29.3% in the previous quarter to 30.8% in the September quarter. This share has fallen significantly compared to more than 40% seven years ago.

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

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

The company is still hiring despite experiencing lower turnover, unlike its larger peers who reported greater volatility on this front. For Coforge, headcount grew to 34,896 in the September quarter, compared to 31,991 a year ago and 34,187 a quarter ago. Employee turnover was favorable at 11.4%, slightly higher than the 11.3% in the previous quarter.

“The company’s distinctive AI-driven solutions, including proprietary automation and software engineering platforms, are fueling its ongoing business transformation work and margin expansion,” IDBI Capital said in a report. The broker has raised FY26 earnings per share estimate by 2.3% and FY27 estimate by 5.2%, while price target for the next twelve months has been raised by 5% to Rs2,030.

According to Elara Capital, the prospects of the top sectors of banking, insurance and travel appear to be good as customers continue to invest. The brokerage firm has raised FY26 and FY27 earnings estimates by 4-7%, while raising the 12-month target price to Rs2,010 from Rs1,850. The stock was trading at Rs1,830.3 at the end of the session on the BSE on Monday.