Coforge advances 10% on healthy March quarter performance

The company is planning for an organic growth of at least 17% in constant currency terms during FY22 and an expansion of EBITDA margin from 18% in FY21 to 19% in FY22

Shares of Coforge moved higher by 10 per cent to Rs 3,181.65 on the BSE in intra-day trade on Thursday after the company reported a robust financial and operating performance during the March quarter of the financial year 2020-21 (Q4FY21).

The IT firm reported continued growth-led momentum, with consolidated revenue growing 7.1 per cent sequentially in dollar terms to $172.1 million during the January-March quarter. In constant currency (CC) terms, revenue grew 5.1 per cent over the preceding quarter. In rupee terms, revenue was up by 6 per cent sequentially and up by 13.7 per cent year-on-year (YoY) at Rs 1,261 crore during Q4FY21.

The company’s profit after tax (PAT) for the quarter increased 17 per cent year-on-year to Rs 133 crore. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin (before ESOPs and acquisition-related costs) for the quarter under review was stable at 18 per cent as growth-driven operating leverage was able to offset the impact of a one-time bonus payout during the quarter to a majority of employees who provided extraordinary support to the firm’s operations and business during the pandemic, Coforge said in a press release.

ICICI Securities had expected Coforge to register a 3.6 per cent quarter-on-quarter (QoQ) growth in dollar revenues. EBITDA margins were expected to remain flat at 16.9 per cent.

Coforge said it is planning for an organic growth of at least 17 per cent in CC terms during FY22 and an expansion of EBITDA margin (excluding ESOP and acquisition-related costs) from 18 per cent in FY21 to 19 per cent in FY22.

The company further said it also sustained its strong order intake momentum during the quarter with two significant deal wins. Fresh business of $201 million was secured during the quarter under review, resulting in the order book executable over the next twelve months expanding to $520 million. The board has recommended an interim dividend of Rs 13 per share, and the record date for this payout will be 19th May 2021.

At 11:25 am, Coforge was trading 9 per cent higher at Rs 3,162 on the BSE, as compared to a 0.07 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped five-fold with a combined 1.85 million equity shares having changed hands on the NSE and BSE so far. The stock had hit a 52-week high of Rs 3,222 on April 16.