Coforge gallops after Q4 PAT jumps 9% QoQ

Coforge climbed 13.11% to Rs 3,271.70 after the company's consolidated net profit rose 9% to Rs 133 crore on 6% increase in net sales to Rs 1,261.50 crore in Q4 FY21 over Q3 FY20.

The firm has reported continued growth-led momentum, with consolidated revenue growing by 7.1% in dollar terms to $172.1 million during Q4 FY21. In constant currency terms, revenue grew 5.1% over the preceding quarter. In rupee terms, revenue rose 6% sequentially and up by 13.7% year-on-year (Y-o-Y) to Rs 1261.50 crore during Q4 FY21.

The EBITDA margin (before ESOPs and acquisition related costs) for the quarter under review stood at 18%, 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 support to the firm's operations and business during the pandemic. Coforge recently announced the acquisition of a controlling interest in SLK Global Solutions, and expenses related to that transaction are partly reflected in Q4 FY21.

For the full year FY2021, Coforge reported an increase of 11.5% in consolidated revenue to Rs 4662.80 crore. In constant currency terms, FY2021 revenues were up 6% Y-o-Y. The EBITDA margin (before ESOPs and acquisition related costs) stood at 18% for the year. The digital and the product engineering portfolio of the firm constituted 52.1% of total revenue for the year. Cumulative order intake during the year is $ 781 million.

Sudhir Singh, the chief executive officer (CEO) of Coforge, said: "The strong business performance in FY21 is a testament to the resolve and the commitment displayed by all members of Team Coforge. We are exiting FY21 with a sequential dollar-term growth of 7.1% in the fourth quarter, which forms a very strong ramp for growth and margin expansion in FY22. Our capabilities, platforms and partnerships in the product engineering, automation, integration and cloud services realm are designed to drive convergence and aid transformation. They are now at scale and are clear differentiators for the firm. With a significantly expanded roster of Fortune 500 clients to work with, we remain committed to delivering impact at the intersection of process and tech knowledge."

Coforge registered a significant rise in operating cashflow during the quarter under review at 144% of EBITDA. The company 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.

Hiring during the quarter was strong, with total employee strength increasing to 12,391 at the end of the quarter, registering an increase of 967 people quarter-on-quarter (Q-o-Q) and 1,235 people year-on-year (Y-o-Y). Billable resources headcount increased by 8.8% Q-o-Q during Q4 FY21. Employee attrition stood at 10.5%.

The company said it is planning for an organic growth of at least 17% in constant currency terms during FY22 and an expansion of EBITDA margin (excluding ESOP and acquisition related costs) to 19% in FY22 from 18% in FY21.

The board has recommended an interim dividend of Rs 13 per share and the record date for this payout will be 19 May 2021.

Coforge is a leading global IT solutions organization. Its proprietary platforms power critical business processes across the financial services and Travel industries.

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