Coforge Q1 FY27 Results (NSE: COFORGE)
Signal: Margin expansion
The read
Coforge delivered a 6th consecutive quarter of OPM expansion (18%, +500bps YoY), driven largely by employee-cost efficiency as revenue grew 23% YoY while employee costs rose only ~17%. PAT surged 87% YoY to ₹667 Cr. The QoQ margin dip from 20% (Q4FY26) to 18% is a minor reversal, but the YoY trajectory remains sharply positive. The standalone vs consolidated revenue gap (~₹425 Cr) reflects the Cigniti amalgamation, which is now fully consolidated. Key positives: sustained margin expansion, strong YoY PAT growth, interim dividend. Key concern: QoQ margin contraction, typical seasonality but needs watching.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,543 Cr | 23% | 2.1% |
| EBIT | ₹0 Cr | ||
| Net profit | ₹667 Cr | 87.4% | |
| EPS | ₹17.67 | 86.1% | |
| EBIT margin | 18% |
P&L walk
Revenue grew 23% YoY to ₹4,543 Cr (2.1% QoQ). OPM expanded 500bps YoY to 18%, the 6th straight quarter of margin expansion (from 13% in Q1FY25). Employee cost as % revenue dropped 400bps YoY to 74.3% — the primary driver of margin expansion. PAT jumped 87.4% YoY to ₹667 Cr, tracking EBITDA growth. EPS ₹17.67 (+86.1% YoY) grew closely with PAT; no material dilution.
Key positives
- OPM expanded 500bps YoY to 18% — 6th straight quarter of YoY expansion (from 13% in Q1FY25).
- PAT grew 87.4% YoY to ₹667 Cr, the highest quarterly PAT in the company's history.
- Employee cost as % of revenue dropped 400bps YoY to 74.3%, demonstrating strong operating leverage.
- Interim dividend of ₹4/share declared, signaling confidence in cash flows.
- Unmodified audit opinion and clean governance.
Key concerns
- QoQ OPM compressed 200bps from 20% (Q4FY26) to 18% — likely a seasonal/snake effect, but the magnitude needs monitoring.
- Attrition, utilisation, and deal TCV not disclosed in this quarterly filing — key operational metrics missing.
- Revenue growth decelerated to +23% YoY vs +30% YoY in Q4FY26 and +57% in Q1FY26 — and the company's 3yr CAGR is 36%; trend is slowing.
Research and educational content only. Not investment advice.