Q1 2027 Coforge Ltd Earnings Call Transcript
Key Points
- Coforge Ltd (BOM:532541) reported a strong start to FY27 with a 49% year-on-year revenue increase and a 101% increase in EBIT, reflecting significant margin expansion.
- The company achieved a consolidated EBIT margin of 16% in Q1, surpassing the full-year guidance of 15.5%, indicating strong operational efficiency.
- Coforge's AI-led Engineering, Data, and Cloud services contributed 86% of consolidated revenue, showcasing the company's strategic focus on high-growth areas.
- The Encora acquisition has been successfully integrated, with cost synergies realized ahead of plan, contributing to a consolidated EBIT margin of 16%.
- Order intake for the quarter was robust at USD691 million, with a next 12-month executable order book reaching an all-time high of USD2.23 billion, providing strong visibility for future growth.
- Despite the strong performance, the EPS for the quarter was INR13.30, slightly down from INR13.80 in the previous quarter, impacted by the increased equity base and interest costs from the Encora acquisition.
- The Rest of the World segment contracted by 22%, reflecting the impact of portfolio exits in the India government and data center businesses.
- There were hedge losses of $10 million during the quarter, with an additional $14 million in mark-to-market losses on outstanding hedges expected to be realized over the next two quarters.
- The company incurred exceptional expenses and acquisition-related costs amounting to $6.5 million in the current quarter.
- The integration of Encora, while ahead of schedule, has led to an increase in G&A costs in absolute terms due to the consolidation of the two companies.
Good day, ladies and gentlemen, and welcome to the Coforge Limited Q1 FY27 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
Joining us today from the Coforge leadership team are Mr. Sudhir Singh, CEO; and Mr. John Speight, President and Executive Director; Mrs. Saurabh Goel, CFO; and Mr. Himanshu Sarda, AVP, Investor Relations.
Before we begin, please note that some of the statements made in today's discussion relating to the future should be construed as forward-looking statements and may involve risks and uncertainties. Please refer to the disclaimer to this effect in the company's Q1 FY 2027 earnings press release.
I now hand the call to Mr. Sudhir Singh. Over to you, sir.
Thank you, [Ima], and a very good morning and evening, ladies and gentlemen. Thank you for joining us today. Please allow me to start today's call with a big reflection and a recap. This, ladies and gentlemen, is the tenth year to the
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