BENGALURU (Reuters) – Indian IT company Coforge reported a marginally smaller-than-expected fourth-quarter revenue on Thursday amid overall tepid tech spending from clients.
WHY IT’S IMPORTANT
India’s $254 billion IT sector has been struggling in recent quarters as clients cut spending on non-essential projects.
Macro headwinds and high-inflation environment have made clients look at contracts that cut down their existing costs. These contracts themed on cost-cutting come at a lower margin profile.
BY THE NUMBERS
Consolidated revenue rose 8.7% year-on-year to 23.59 billion rupees in the three months ended March 31, falling short of analysts’ estimate of 23.95 billion rupees, as per LSEG data.
Net profit rose 95% to 2.24 billion rupees for the three-month period.Coforge’s fresh order intake more than doubled to $774 million from $301 million a year earlier during the January-March period. This was on account of $400 million deal signed during the quarter.
The company also announced plans to acquire up to 54% stake in Cigniti Technologies.
WHAT’S NEXT
Aided by acquisition of Cigniti Technologies, the company said it aims to grow its revenue to $2 billion by fiscal 2027.
It also plans to improve its operating margin by 150–250 basis points during the same period.
GRAPHIC
KEY QUOTES
“The $400 million deal signed in Q4, the 56% year-on-year increase in order intake and the sequential margin improvement in the fourth quarter set us up strongly to deliver robust growth in fiscal year 2025 with expanded margins,” CEO Sudhir Singh said.
(Reporting by Sai Ishwarbharath B and Rama Venkat; Editing by Sohini Goswami)
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