Coforge Shares Surge 9% On Dividend, Q3 Results And Acquisition; Key Details

Coforge shares surge 9% on dividend, Q3 results and acquisition; key details

Coforge Shares Surge 8% on Strong Q3 Performance and Positive Developments

Shares of Coforge Ltd jumped 8% on Thursday after the IT major reported robust Q3 earnings and announced key strategic moves. The company posted a 10.3% increase in net profit for the December quarter, supported by a 42.8% YoY growth in revenue, which reached ₹3,318.2 crore. The stock also benefited from the board’s decision to declare a third interim dividend of ₹19 per share, with January 30 set as the record date for shareholder eligibility.

Coforge shares surged as much as 9% to hit ₹8,962 on the BSE, marking a remarkable 45% gain over the past year.

Adding to the positive momentum, Coforge announced that its wholly-owned subsidiary has entered into a stock purchase agreement with Xceltrait Inc. and its stockholders. The deal, valued at $17.85 million, involves acquiring all outstanding shares of Xceltrait Inc., signaling Coforge’s continued focus on strategic expansion.

Q3 Financial Highlights

  • Revenue: Up 8.4% QoQ in constant currency (CC) terms; in dollar terms, revenue stood at $397.1 million, reflecting a 7.5% QoQ and 40.8% YoY growth.
  • EBITDA: Increased 29.3% YoY and 7.2% QoQ.
  • Order Book: $1.37 billion executable for the quarter, up 40.1% YoY.
  • Order Intake: $501 million, marking the second consecutive quarter with $500 million+ intake.
  • Dividend: ₹19 per share, with January 30 as the record date.

CEO’s Perspective

Sudhir Singh, CEO and Executive Director of Coforge, highlighted the company’s impressive performance, despite a seasonally weak quarter:

  • 8.4% sequential CC growth and 40.3% CC YoY growth.
  • Four large deals signed during the quarter.
  • Significant sequential margin expansion of 122 basis points.
  • A robust pipeline of large deals and a 40% YoY increase in the next twelve-month order book.

“This gives us confidence that the coming year will once again see robust and sustained growth,” Singh added.

Operational Highlights

  • Headcount: Total employees reached 33,094, with a net addition of 611 during the quarter. Overall headcount has grown 16% organically since the beginning of the year.
  • Regional Growth: Revenue growth was broad-based, with contributions from the Americas (69.2% YoY), EMEA (20.5% YoY), and Rest of the World (3.3% YoY).
  • Cigniti Business: Delivered 3.5% CC QoQ growth, with EBITDA margins improving to 17.3% from 11% in Q4FY24.

Deals and Market Reach

Coforge secured four large deals during the quarter across North America and ASEAN. The company’s focus on expanding its global footprint and enhancing operational efficiency has strengthened its position in the IT services sector.

With strong order intake, consistent growth in headcount, and strategic acquisitions, Coforge is well-positioned for sustained growth in the coming quarters.

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