Coforge Q2 net profit rises 36.6% to Rs 220 crore, revenue up 19.9%

IT company Coforge Ltd on Thursday reported a consolidated net profit of Rs 220.6 crore for Q2 FY23, an increase of 36.6 per cent year-on-year (YoY). This is against a net profit of Rs 161.5 crore in the year-ago period, the company said in a regulatory filing.

The revenue from the operations grew 19.9 per cent to Rs 1,959 crore in constant currency, compared to Rs 1,569 crore a year ago. The firm has reiterated its annual revenue guidance to grow at least 20% in a constant currency term.

The board has recommended an interim dividend of Rs 13 per share, with the record date for payout on 4 November 2022. Adjusted EBITDA margin for the quarter increased by almost 190 bps to 18.4%, driven by continued offshoring expansion, utilization uptick, higher contribution from higher margin businesses, and operational improvements, the company said.

On a sequential basis, the net profit saw a 28.3 per cent rise from Rs 171.9 crore in the previous quarter. The revenue jumped 7.1 per cent against Rs 1,829 crore in Q1 FY23. The contribution of offshore IT revenue has grown by 49.8 per cent in the quarter that ended on September 30, the company said. The revenue from Banking and Financial Services (BFS) – the largest vertical for the company, now contributes 31.7 per cent of the total revenue.

The attrition on the last twelve months (LTM) basis was at 16.4 per cent, down 1.6 per cent quarter-on-quarter. Headcount at the end of the quarter has increased to 22,991 employees.

“A record high twelve-month locked-in order book of $800 million plus, a highly committed workforce with one of the lowest employee attrition numbers across the industry, a large deal machinery that continues to close pursuits at scale, robust quarterly order intake of $300 million plus, and the absence of a disproportionate reliance on any single client gives us confidence that revenue growth will continue to be sustained and robust in FY’23 and beyond,” said Mr. Sudhir Singh, Chief Executive Officer, Coforge Ltd.

Operating margins contracted 1.5 per cent against the same period a year ago. The margins for the quarter came down to 9.1 per cent. The company added 11 new clients during the quarter, while total order intake stood at $304 million during the quarter that ended on September 30.