Coforge stock zooms 9% on strong Q2FY25 results, bulging order book

Shares of Coforge surged up to 8.85 per cent at Rs 7397.25 a piece on the BSE on Wednesday after the company delivered strong quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25).

The information technology firm reported a nearly 17 per cent increase in net profit, reaching Rs 212 crore for the July-September quarter, compared to Rs 181 crore a year earlier. 

Revenue from operations surged over 34 per cent year-on-year, climbing to Rs 3,062 crore in Q2FY25 from Rs 2,276 crore. The company achieved a total order intake of $516 million during the quarter, including three large deals, marking the eleventh consecutive quarter with order intake exceeding $300 million.

Coforge's order book, which is executable over the next 12 months, now stands at $1.3 billion, reflecting a robust 40 per cent year-on-year growth. Additionally, the company added 13 new clients in the quarter.

“A large deals pipeline that is looking very robust and an even strengthening order executable which now is 40 percent higher YoY gives us confidence that the quarter and quarters to come shall see robust and sustained growth. The growth and the margin expansion at Cigniti are a preview of sustained growth and further increases in margin to follow. We have operationally fully integrated the Cigniti team and the synergies have exceeded even our expectations, " Sudhir Singh, chief executive officer, Coforge said in a statement. 

Headcount of the IT company rose significantly, increasing by 5,871 to a total of 32,483 employees, while attrition improved to 11.7 per cent, down 130 basis points year-on-year. Notably, this figure includes 4,430 employees from the recently acquired entity Cigniti, with Coforge adding 1,441 employees organically during the quarter.

Employee benefit expenses climbed nearly 35 per cent year-on-year, totaling Rs 1,910 crore for the quarter ended September 30, 2024. The company's EBIT (earnings before interest and tax) margin saw a slight decline of 14 basis points year-on-year, settling at 11.4 per cent.

In a positive move for shareholders, Coforge's board has approved a second interim dividend of Rs 19 per share, with October 11 set as the record date.

Coforge share price history

The company’s stock has outperformed the market year to date as it has risen 19.2 per cent, while soaring 49.9 per cent in the last one year. In comparison BSE Sensex has risen 11.2 per cent year to date and 24.5 per cent in a year. 

The company has a total market capitalisation of Rs 49,200 crore . Its shares are trading at a price to earnings multiple of 52.58 times and at an earning per share of Rs 129.25. 

At 10:05 AM, the stock price of the company was up 8.78 per cent at Rs 7392 a piece on the BSE. By comparison, the BSE’s Sensex rose 0.20 per cent to 80,379.42 level.