Coforge net profit rises 56.5% as ‘record’ deal wins boost growth

Coforge Ltd’s net profit rose 56.5% year-on-year to ₹588.1 crore in the September quarter, as the mid-tier IT services company signed a record eight large deals and reported strong revenue growth. The quarter marked its first full quarter of consolidating Encora’s financial results following the acquisition.

Revenue for the second quarter of FY27 grew 53.6% year-on-year to ₹6,170.8 crore. In dollar terms, revenue rose 40.1% to $652.2 million. Organic revenue growth was 3.8% sequentially in constant-currency terms.

Coforge’s earnings before interest and tax (EBIT) rose 67.8% year-on-year to ₹984.7 crore, while its EBIT margin increased to 16% from 14.6% a year earlier. The company raised its consolidated EBIT margin guidance for FY27 to 16% from 15.5% earlier. It expects its reported EBIT margin to reach 17% in the fourth quarter.

Record deal wins

The company’s fresh order intake reached $1.04 billion during the quarter, up 102% year-on-year and 50.6% sequentially. It signed eight large deals, the highest number in a single quarter in its history, the company said. One of the deals was a $230-million UK public-sector engagement signed in July 2026.

Coforge’s executable order book for the next 12 months rose 45.4% year-on-year to an all-time high of $2.38 billion.

“Our increasing large deal velocity offers assurance of sustained robust growth in the future as well,” Sudhir Singh, Chief Executive Officer and Executive Director, said during the earnings call.

The company hopes to sign eight or more large deals in the current quarter, Mr. Singh said. He added that most of its large deals were sole-sourced and driven by proactive solutions designed around individual enterprises’ operating needs.

AI and margins

Coforge is using artificial intelligence both to develop client solutions and to improve its own delivery processes. AI-led engineering, data integration and cloud services accounted for 86% of consolidated revenue during the quarter, according to the company.

Mr. Singh said AI was putting pressure on traditional technology-services pricing models as automation reduced the labour required to deliver projects.

“We believe that AI is breaking the link between scale and margin leadership for the tech services industry,” he said.

“Time and material, effort-based economics face pressure as automation reduces labour content,” he added.

The company expects AI-led efficiencies in its internal operations and client delivery to support profitability. During the earnings call, management said efficiencies from AI in fixed-price contracts should begin to show up in its margin numbers in the fourth quarter.

Encora integration

Mr. Singh said margin expansion at Encora was ahead of the acquisition plan and that Coforge expected the acquired business’s revenue growth to mirror that of the parent company from the third quarter onwards. The company did not quantify Encora’s contribution to the quarter’s year-on-year revenue growth.

Coforge added 1,137 employees during the quarter, taking its total headcount to 47,365. Utilisation stood at 82.4%, while trailing 12-month attrition, excluding the business process services unit, was 10.4%.

UnearthInsight, an IT industry research and advisory firm, said Coforge’s strong deal wins and acquisition-led expansion, including Encora, were supporting its growth alongside organic expansion and new-client wins. However, it cautioned that sequential growth could moderate in Q3, with the conversion of its deal pipeline into revenue determining how much growth the company could sustain through the rest of FY27.