Coforge Q1 results preview: Margins may remain under pressure; all verticals likely to post healthy growth

Coforge Q1 preview: Coforge, formerly known as NIIT Technologies, is scheduled to release its June quarter (Q1FY24) earnings on July 20 (Thursday). The company, as per Zee Business Research, is expected to post a 95.7 per cent rise in consolidated Reported profit after tax (PAT) at Rs 225 crore on a sequential basis. In the preceding quarter, the IT services firm had registered a net profit of Rs 115 crore. It must be noted that the company had an exceptional loss of Rs 52 crore in the March 2023 quarter. The adjusted PAT last quarter was Rs 233 crore, and the same for the quarter under review is seen at Rs 225 crore, down 3.4 per cent.

Revenue is seen at Rs 2,250 crore, up 3.7 per cent quarter-on-quarter (QoQ), while revenue in US dollar terms is seen rising 3.6 per cent QoQ to $27.35 crore. Further, in constant currency (CC) terms, Coforge's revenue is seen rising by 3.4 per cent.  Strong executives and a ramp-up in deals will lead to growth in revenue. All the verticals are expected to post healthy growth.

Earnings before interest and tax are expected to decline 6.3 per cent QoQ to Rs 315 crore against Rs 336 crore logged in the preceding quarter. EBIT margin is seen at 14 per cent against 15 per cent recorded in the March 2023 quarter. Wage costs and expenses related to Visas are expected to put pressure on the company's margins.

Key monitorables include FY24 guidance, BFSI vertical outlook, deal win TCV, and attrition.

Coforge Q4 nos

Coforge reported a nearly 45 per cent year-on-year fall in its consolidated net profit for the March quarter at Rs 115 crore hurt by one-time expenses, but the company raced past the $1 billion revenue milestone for the full year FY23. Net profit for the fourth quarter, excluding one-off expenses at Rs 232.7 crore, rose 12.1 per cent year-on-year.

The one-time expenses pertaining to the cost incurred by the company towards gifting an Apple iPad to each of its 21,000 staff to celebrate the achievement of the $1 billion revenue milestone, the company said.

The company has also made provisions for US listing plans, primarily on legal and banking expenses, and will take a call on the timing of secondary ADRs based on market conditions.