Coforge , a leading IT services company, has set an ambitious target of achieving a 14% EBIT (Earnings Before Interest and Taxes) margin for the fiscal year 2026, despite ongoing challenges in the IT sector. The company's leadership remains optimistic about its growth prospects, citing several key factors contributing to this confidence.

Strong Deal Closures and Order Book Growth

CEO Sudhir Singh highlighted the company's robust performance in securing new business. Coforge has reported a significant increase in its next 12-month signed order book, which grew by an impressive 46.9% compared to the same period last year. This substantial growth in the order book provides a solid foundation for the company's future revenue streams and supports its ambitious margin targets.

Q1FY26 Financial Performance

Coforge's financial results for the first quarter of fiscal year 2026 demonstrate the company's resilience and growth trajectory:

While the company saw strong growth in revenue and net profit, there was a slight decline in EBIT margins, which decreased from 11.8% in the previous quarter to 11.3% in Q1FY26.

Strategies for Margin Improvement

To achieve the targeted 14% EBIT margin by FY26, Coforge is focusing on several key strategies:

1. Structural Cost Reductions: The company is implementing measures to optimize its cost structure, which is expected to contribute to margin expansion.

2. Strong Deal Pipeline: Continued focus on closing high-value deals is anticipated to drive revenue growth and improve profitability.

3. Operational Efficiency: Coforge is likely to leverage its growing order book to achieve better economies of scale and enhance operational efficiency.

Shareholder Returns

In a move to reward its shareholders, Coforge has declared an interim dividend of Rs 4 per share. The record date for this dividend has been set as July 31.

Market Response

Despite the positive outlook and strong quarterly results, Coforge's shares experienced a decline on the National Stock Exchange (NSE). The stock fell by 8.19% to close at Rs 1,698.20. This market reaction may reflect broader concerns in the IT sector or profit-taking by investors.

Conclusion

Coforge's ambitious target of a 14% EBIT margin by FY26 demonstrates the company's confidence in its business model and growth strategies. While challenges persist in the IT sector, Coforge's strong order book growth and focus on operational efficiency position it well to navigate the competitive landscape. Investors and industry observers will be keenly watching the company's progress towards its margin goals in the coming quarters.

Coforge Limited , a global IT solutions provider, has announced its financial results for the first quarter of fiscal year 2026, showcasing robust growth and strategic developments.

Financial Highlights

Coforge delivered an outstanding performance in Q1 FY26, with significant growth across key financial metrics:

The company's revenue grew by 9.6% quarter-on-quarter (QoQ) in USD terms, reaching $442.40 million. This represents a substantial 54.5% year-on-year (YoY) increase. In constant currency terms, the QoQ growth stood at 8.0%.

EBITDA for the quarter was $77.30 million, up 13.6% QoQ and 50.1% YoY. The EBITDA margin improved to 17.5%, an increase of 61 basis points QoQ.

Profit After Tax (PAT) saw a significant jump, reaching $38.10 million, up 24.5% QoQ and 84.6% YoY.

Business Performance

Coforge demonstrated strong business momentum in Q1 FY26:

• Order intake for the quarter was $507 million.
• The company signed five large deals across North America, UK, and APAC regions.
• The order book executable over the next 12 months stood at $1.55 billion, representing a 46.9% YoY increase.
• Coforge added six new clients during the quarter.

Sectoral Performance

The company reported growth across various sectors:

• Travel, Transportation, and Hospitality (TTH) showed the highest growth at 31.2% QoQ and 92.2% YoY.
• The Banking and Financial Services (BFS) sector, despite a slight QoQ decline of 1.1%, grew by 32.2% YoY.
• The Insurance sector grew by 1.0% QoQ and 19.9% YoY.

Operational Metrics

Coforge maintained strong operational metrics:

• The global headcount reached 34,187, with a net addition of 1,164 employees during the quarter.
• The attrition rate remained low at 11.3%, among the lowest in the industry.

Strategic Developments

The company announced several strategic initiatives:

1. Interim Dividend: The Board of Directors declared an interim dividend of ₹4 per equity share for FY 2025-26.

2. New RTA Appointment: Coforge will appoint MUFG Intime India Private Limited as its new Registrar and Share Transfer Agent, effective November 15, 2025.

3. Acquisition: The company has agreed to acquire Artexmind S.A., a shelf company, for approximately $10,000 through its subsidiary, Coforge Solutions Private Limited. This acquisition aims to facilitate operations in a new geography.

Management Commentary

Sudhir Singh, Chief Executive Officer and Executive Director of Coforge Ltd., expressed confidence in the company's performance and future prospects. He highlighted the company's focus on AI-driven solutions, stating, "Coforge is leading from the front with our Quasar AI Marketplace, AgentSphere library, and real-world deployments, executing at scale and making impact across sectors where we have hyper-specialization."

The strong Q1 FY26 results and strategic initiatives position Coforge for continued growth in the evolving IT services landscape, with a particular emphasis on AI-driven solutions and expansion into new markets.