Coforge vs KPIT Technologies Q4 FY26

Coforge delivered a strong FY26 with 29.2% USD revenue growth, driven by broad-based vertical strength (healthcare +98%, travel +62%) and 21 large deal wins. EBITDA margins expanded 430bps YoY to 18.6%, aided by AI-led automation and G&A cost containment. Q4 EBIT margin hit a record 16.6%, up 370bps YoY. The executable order book stands at a record $1.75B, up 16.4% YoY, providing good visibility. Management guided FY27 consolidated EBITDA margins of 20.5-21% and EBIT margins of 15.5% (consolidated) / 16.5-17% (standalone), with FCF/PAT expected at 100%+. A planned exit of ~$20M low-margin India business will temporarily impact Q1 revenue, but overall growth is expected to be robust. Key risk: sustained weakness in the BFS vertical, which grew only 12% in FY26 due to a large client account issue, though management expects improvement.

Guidance read

FY27 Consolidated EBITDA Margin 20.5-21%: Management guided EBITDA margins of 20.5% to 21% for FY27 on a consolidated basis, driven by AI automation, G&A leverage, and Enkora synergies. FY27 Standalone EBIT Margin 16.5-17%: Standalone EBIT margin expected between 16.5% and 17% in FY27, excluding Enkora amortization. FCF to PAT at 100%+ from FY27: Free cash flow to PAT ratio expected to be at least 100% from FY27 onwards, up from earlier guidance of 70-80%. Q1 FY27 Revenue Flattish QoQ Due to India Business Exit: Revenue in Q1 FY27 expected to be flattish sequentially due to discontinuation of ~$20M low-margin India business, with growth resuming from Q2.

Risk read

Key risks include BFS Vertical Stagnation — BFS revenue grew only 12% in FY26, stuck at ~$120-123M for five quarters due to a large client account issue. Recovery depends on management's refactoring efforts.; Hedge Losses Impacting Reported Earnings — Mark-to-market hedge losses of ~₹164Cr for FY26 (₹70Cr in Q4) will continue for 1-2 quarters before tapering, affecting reported other income.; AI Deflationary Pressure on Revenue — Industry-wide AI-driven code generation could compress billing rates, though management argues total cost of ownership remains high and managed services will offset..

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KP

KPIT Technologies

Q4 FY26 · Information Technology

KPIT reported a muted FY26 with Q4 constant currency growth of 1.8% QoQ, but highlighted $349M in deal wins and 18% YoY growth in trucks & off-highway. Two large SDV programs are ramping down, creating a ~4-5% sequential revenue gap in H1 FY27, partially offset by new account wins. Management guided FY27 EBITDA margin of 20.5-21.2% despite increased AI investments, and medium-term margin expansion to 22-24% driven by solutions/products mix shift to 50% of revenue. Key risks include further program cancellations (e.g., Honda) and macro headwinds from tariffs/geopolitics. The company is expanding into India, China, and micromobility, but near-term growth remains uncertain.

Guidance read

FY27 EBITDA margin guidance of 20.5-21.2%: Despite increased investments in AI, solutions, and new markets, management expects EBITDA margin to improve modestly. Medium-term EBITDA margin target of 22-24%: Driven by higher share of solutions and products (target 50% of revenue in 3 years) and fixed-price contracts. Solutions & products revenue to grow 30% YoY in FY27: Management expects 30%+ growth in this segment, which currently represents ~15% of revenue. India revenue to double in FY27: India currently ~4% of revenue; management expects strong growth driven by local OEMs and global OEMs' India-for-India strategy.

Risk read

Key risks include Unexpected program cancellations (e.g., Honda) — Honda cancelled all new platform programs, impacting KPIT's revenue. Management noted this was a surprise and will affect H1 FY27.; Delays in middleware and autonomous driving programs — New architecture programs have been pushed out, leading to lower-than-expected revenue in these areas. Recovery may take 1-2 years.; Competition from Chinese automotive R&D firms — Analyst raised concern about Chinese competitors with high R&D spend and negative EBITDA margins. Management acknowledged competition but believes KPIT's localized solutions and ecosystem give it an edge.; Macro headwinds from tariffs and geopolitical conflicts — Management noted that if current conflicts persist beyond 3-6 months, they could impact OEM spending, especially in the truck segment..

Promise ledger

Scorecard data is being built as historical quarters are processed.