Shares of Coforge Limited jumped 9 per cent to hit an intraday high of Rs 4,799.15 on BSE after the company posted a strong set of numbers for the quarter ended December 2021.
The company reported an over 50 per cent rise in consolidated net profit at Rs 183.7 crore for the quarter ended December 2021 and has revised its annual revenue growth outlook to around 37 per cent. Profit in the year-ago period stood at Rs 122 crore.
Revenue from operations rose to Rs 1,658.1 crore in the same quarter from Rs 1,190.6 crore in the year-ago period. The firm has revised upwards its annual revenue guidance and expects consolidated revenue to grow around 37 per cent in currency terms. It expects adjusted EBITDA to grow around 44 per cent over the previous year.
The stock opened 2 per cent higher at Rs 4,501 against the previous close of Rs 4,400.60 on BSE. With a market capitalisation of more than Rs 29,000 crore, the shares stand higher than 200 day moving averages but lower than 5 day, 20 day, 50 day and 100 day moving averages.
Brokerage house Prabhudas Lilladher noted that the order intake is healthy at $247 million including one large 6-year deal of $45 mn from a European Public sector client. The next 12 months’ executable order book is $701 million, +2% QoQ, 40 per cent YoY.
It said that strong growth momentum is expected to continue in FY23 given strong deal pipeline, ability to win large deals, strong client mining efforts, increased investments in sales and bounce back of tech spends in Travel.
"Our EPS estimates increase by 2.2 per cent /1.7 per cent for FY23/24 led slight increase in margin estimates. We arrive at DCF based target price of Rs 5,778 from earlier Rs 5,708 (implying target multiple of 34x on FY24 EPS). At CMP, stock trades at 30x/26x on FY23/24E EPS of INR 145/172 with Revenue and EPS CAGR of 16/23 per cent, respectively over FY22-24," it added.
“The quarter saw the firm register its highest quarterly adjusted EBITDA margin over the last ten years despite existing supply-side pressures. The firm also experienced robust broad-based sequential growth, continued net headcount addition at a very fast clip, strong growth in our top ten clients, yet another large deal closure and a continued improvement in the offshore-onsite revenue mix," said Mr. Sudhir Singh, Chief Executive Officer, Coforge Ltd.
"Onboarding senior talent at scale, successful integration of acquired businesses and attrition below industry average continue to differentiate and mark out our performance," he added.
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