Synopsis
Coforge's net profit surged over 135% in Q4 FY26, driven by AI efficiencies and strong revenue growth. The IT service provider reported robust topline expansion, exceeding street estimates, with key verticals like healthcare and hi-tech showing significant year-on-year gains.Listen to this article in summarized format
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Revenue for the January-March period stood at Rs. 4450.4 crore, up 30% on-year, while sequentially it gained 5.2%, topping street estimates.
In dollar terms, revenue for the quarter came in at $489.1 million, gaining 2% sequentially in constant currency. Brokerages on average expected revenue to grow between 2% and 2.7% (constant currency) quarter on quarter.
“We are moving from a world of IT delivery to one of business orchestration, and as this happens, firms who are engineering outcomes for customers are compounding, while firms who continue to bill ours are getting left behind. Just like the advent of cloud created downstream opportunities for tech services, AI too, is creating its own set of new value pools,” the chief executive officer, Sudir Singh, said in the post-earnings call.
“Our ability to grow at this rate in a very challenging environment is driven by our ability to increase wallet share, particularly across our key accounts, which drove significantly this fiscal, outpacing the broader business,” Singh added.
For the full year 2026, revenue grew 35.9% on-year to Rs. 16,402.7 crore, compared with the Rs. 12,073 crore in FY25. Net profit for the year stood at Rs. 1555.7 crore, compared with Rs. 812.1 crore last year.
Revenue growth was led by the healthcare and hi-tech vertical, which accounts for 11.5% of its revenue, advancing 78.4% year-on-year. Its largest sector, banking and financial services, gained 5.5% YoY, while the insurance sector gained 14.5%.
The travel and hospitality vertical, its second largest segment, grew 59.4% on-year basis, despite the ongoing West Asia conflict. “At this point in time, from our perspective, the travel vertical continues to do well in the short term,” Singh said.
The company additionally reiterated that the impact of Spirit Airlines’ bankruptcy, as reported in ET on Monday, is limited to 10 basis points (0.1% of its revenue) for FY27.
Among geographies, Americas, its largest market, gained 34.6% YoY, while Europe, Middle East and Africa (EMEA) grew 14.3%. Rest of the world grew the most, at 49.9%.
The Noida-headquartered company’s operating margins, a key metric for IT companies, for Q4 were at 16.6%, expanding by 430 basis points year-on-year. Multiple tailwinds contributed to the expansion, including selling and general administrative (SG&A) leverage adding 100 basis points, 80 bps of currency tailwinds, 50 basis points from direct cost reduction and another 40 basis points from lower marketing spends, among others.
The company guided its operating margins for FY27 at 15.5%, including the acquisition of Encora, while its between 16.5% and 17%, excluding the acquisition.
The increase in margins is on the back of using AI at scale, inorganic contribution from its acquisition and the planned closure of a $20 million low-margin portfolio in its India business, chief financial officer Saurabh Goel said.
Aided by five large deals won in the three months ended March 2026, its deal bookings stood at $648 million, compared with $593 million in the previous quarter. Its executable order book for the next 12 months came up to $1.75 billion, a 16.4% YoY increase.
The company added just about 436 employees to its payroll in the fourth quarter, taking its headcount to 35,777. Attrition eased to 10.8%, contracting by 10 basis points QoQ, and among the lowest in the industry.
The board set May 16, 2026, as the record date for determining the eligibility of Cigniti shareholders to receive Coforge equity shares under the amalgamation scheme. The dividend proposal has been deferred to the next board meeting.
