Coforge Q3 Review - Operating Profit Margin Outlook Upgrade, Positives Priced In: Dolat Capital

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Dolat Capital Report

Coforge Ltd. reported revenue growth of 3.3% QoQ in constant currency terms (our estimate 3.6%) led by traction in banking and financial services, travel and other vertical (12.7%/9.7%/3.5% QoQ).

Operating profit margin stood at 13.0% (down 77 basis points QoQ) below our estimate of 13.5% due to selective wage hikes leading to 6.5% QoQ increase in employee cost.

Leading indicators are strong as it signed two large deals (in Insurance and health) taking order intake to $192 million.

12 months executable order book grew 18% YoY to $501 million. Pipeline also contains several large deals and win rates are improving.

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