Mid-cap IT firm Coforge on Monday reported a 15.3% sequential decline in net profit for the April-June quarter FY27 to Rs 519 crore from Rs 612 crore in the previous quarter while revenue increased by 24.2% sequentially to Rs 5,528 crore from Rs 4,450 crore.
However, on a year-on-year (y-o-y) basis, the Noida-headquartered firm’s net profit jumped by 63.4% from Rs 228.5 crore.
The company attributed the fall in profitability to one-time costs including a Rs 61.3 crore charge for the Encora acquisition closed last quarter, Rs 5 crore for legal expenses and a Rs 10.8 crore provision against a customer receivable after a bankruptcy filing.
Barring the exceptional items, the firm showed organic constant currency growth of 5.2% sequentially.
Operating margin expanded to 16%, ahead of the company’s FY27 guidance of 15.5%.
Coforge’s order intake stood at $691 million TCV for the quarter with the executable order book for the next twelve months coming at a 27% quarter-on-quarter increase at $2.23 billion. The IT services firm also inked four large deals signed across North America, Europe and Latin America.
“Our Q1 performance, with 21.1% sequential growth and 33.3% y-o-y growth in US dollar terms, reflects the strength of our differentiated capabilities and an execution intensity that is uniquely our own,” Sudhir Singh, CEO and executive director, Coforge said in a statement.
“The confluence of our next twelve month signed order book of $2.23 billion, an exceptionally strong large deal pipeline and differentiated capabilities with 86% of our revenues coming from AI-led engineering, data and cloud services has set us up to be the industry growth leader for the third year running. Our consolidated Q1 margins have come ahead of our annual margin guidance.
The 414 bps YoY expansion in EBIT margin and 285 bps y-o-y expansion in EBITDA margin reflect the impact of AI infusion at scale in client delivery and internal operations. With the Encora acquisition completely operationally integrated and with strong demand, record visibility, and a rapidly expanding pipeline of AI-led opportunities, FY27 is shaping up to be an exceptional performance year for the firm.”
Encora comprised 17.3% of total revenue which amounted to Rs 957.9 crore and 29.7% of the company’s net profit which came up to Rs 157.8 crore.
Expressing optimism over the company’s robust deal pipeline unlike most large cap IT services firms, Singh added that the order intake for the next quarter is likely to be the highest number in Coforge’s history.
Singh admitted that while AI-led deflation still existed, there are several strong tailwinds to offset it, which will only multiply in the long-term. “The company is working on some large legacy modernisation projects which wouldn’t be possible more than a year ago in the absence of AI-infused technology,” he explained. “Similarly, there are very significant tailwinds around creation of data foundations and AI architecture, cloud modernisation and short-term tailwinds around security and risk management.”
The company’s total headcount stood at 46,228 with a net addition of 10,451 employees sequentially from the previous quarter. Meanwhile, the company’s attrition rate for the last-twelve-months was at 10.4%.
Coforge has also declared interim dividend of Rs 4 per share with the record date fixed as August 3, 2026.