Coforge shares jump 10% after Q1 results, dividend; Morgan Stanley sets Rs 1,700 target

Shares of Coforge climbed 10 per cent in Tuesday's trade after the IT firm reported a 110 per cent YoY jump in net profit to Rs 518.60 crore for the June quarter, while its Q1 Ebit margin came in ahead of the company's full-year guidance. Revenue rose 49 per cent YoY to Rs 5,527.70 crore. In dollar terms, revenue and net profit grew 33 per cent and 46 per cent, respectively. Ebit margin expanded 414 basis points (bps) YoY to 16 per cent in the quarter.
Following Coforge's Q1 results, Morgan Stanley suggested an 'Overweight' on the stock with an unchanged target of Rs 1,700, Bloomberg data suggested.

The IT firm had earnings call scheduled for Tuesday morning. Fresh brokerage targets will follow soon. By 10 am, the scrip had hit a high of Rs 1,674.70 on BSE, up 9.56 per cent. It pared gains later, but was still up 9 per cent at Rs 1,666.05.

Coforge said its order intake for the quarter stood at $691 million. With this, the IT firm's executable order book over the next twelve months at $2.23 billion, a 27 per cent quarter-on-quarter (QoQ) increase. Coforge said it saw four large deals across North America, Europe and Latin America during the quarter. Its attrition stood at 10.4 per cent for the quarter compared with compared 10.8  per cent in the last quarter. 

Coforge's CEO and Executive Director Sudhir Singh said the confluence of signed order book of $2.23 billion, an
exceptionally strong large deal pipeline and differentiated capabilities with 86 per cent of revenues coming from AI-led engineering, data and cloud services has set Coforge up to be the industry growth leader for the third year running.

"Our consolidated Q1 margins have come ahead of our annual margin guidance. The 414 bps YoY expansion in EBIT margin and 285 bps YoY expansion in Ebitda margin reflect the impact of AI infusion at scale in client delivery and internal operations. With the Encora acquisition completely operationally integrated and with strong demand, record visibility, and a rapidly expanding pipeline of AI-led opportunities, FY27 is shaping up to be an exceptional performance year for the firm,” he said.

Coforge dividend
Meanwhile, the Coforge board has declared interim dividend of Rs 4 per share, for the financial year 2026-27. August 3 has been fixed as record date for the purpose of ascertaining the eligibility of shareholders for payment of interim dividend.