During Wednesday’s trading session, the shares of a leading global IT solutions organisation surged nearly 12.3 percent to hit a new 52-week high at Rs. 7,632.75 on BSE, after the company reported Q2 FY25 financial results with a rise in net profit by 68 percent QoQ and 24 percent YoY.
With a market cap of Rs. 50,354 crores, at 01:13 p.m., the shares of Coforge Limited were trading in the green at Rs. 7,550.05, up by nearly 11 percent, compared to its previous closing price of Rs. 6,795.6.
What’s the news:
The fluctuations in the share prices were observed after Coforge Limited announced the financial results for Q2 FY25, through the latest filings with the stock exchanges on Tuesday post-market hours.
For Q2 FY25, Coforge reported consolidated revenue from operations of Rs. 3,062 crores, reflecting a rise of around 27.5 percent QoQ from Rs. 2,401 crores in Q1 FY25, as well as a growth of about 34.5 percent YoY from Rs. 2,276 crores in Q2 FY24.
The company’s net profit for Q2 FY25 increased to Rs. 234 crores, representing a significant growth of around 68.3 percent QoQ from Rs. 139 crores in Q1 FY25 and a year-on-year increase of nearly 24.5 percent from Rs. 188 crores in Q2 FY24.
EBITDA for Q2 FY25 stood at Rs. 484 crores, representing an increase of around 39.2 percent YoY from Rs. 347.8 cores in Q2 FY24, with an EBITDA Margin of 15.8 percent, up by 53 bps YoY from 15.3 percent, during the same period.
Further, the Board has recommended an interim dividend of Rs. 19 per share, and the record date for this payout will be 11th October 2024.
Business Highlights:
In Q2 FY25, the order intake reached $516 million, marking the eleventh consecutive quarter with order intake exceeding $300 million. The company’s order book, executable over the next 12 months, stood at $1,305 million at the end of the quarter, reflecting a 40 percent YoY growth. Further, the company secured 13 new clients during this period.
By the end of the quarter, the headcount was 32,483, reflecting a net addition of 5,871 employees sequentially, which included 4,430 from Cigniti.
The attrition rate for the last twelve months, including Cigniti, stood at 11.7 percent, representing a decrease of 130 basis points YoY, and continues to be amongst the lowest in the IT services industry.
The Chief Executive Officer of Coforge noted the presence of a robust pipeline of large deals and a strengthening order executable, which is now 40 percent higher compared to the previous year, instilling confidence in continued strong growth for the current and upcoming quarters.
Additionally, he remarked that the growth and margin expansion observed at Cigniti indicate a preview of sustained growth and potential further margin increases. The operational integration of the Cigniti team has been completed, with synergies surpassing expectations.
On 2 May, Coforge proposed to acquire a 54 percent stake in Cigniti Technologies Ltd. at Rs 1,415 per share, in a deal valued at $220 million. At that time, the Chief Executive Officer, Sudhir Singh, stated that this acquisition would help Coforge become a $2 billion revenue enterprise.
In June 2024, India’s anti-trust regulator, the Competition Commission of India, approved the acquisition, and the deal was completed during the second quarter.
Stock Performance:
The stock has delivered positive returns of nearly 53.5 percent in one year, and around 45 percent returns in the last six months. So far in 2024, the shares of Coforge Limited have given positive returns of about 22.2 percent.
About the company:
Coforge Limited is an Information Technology (IT) services company providing end-to-end software solutions and services.
The company is engaged in application development & maintenance, managed services, cloud computing and business process outsourcing to organisations in a number of sectors viz. financial services, insurance, travel, transportation & logistics, manufacturing & distribution and government.
Written by Shivani Singh
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