Risks
4 risks
Risk Intelligence
Wage hike margin impact in Q3
View Risks →Coforge Ltd — Q2 FY26
Coforge delivered an exceptional Q2 FY26 with 5.9% sequential constant currency growth and 14% EBIT margin, up 251 bps QoQ.
bullish
high
✓ Verified against BSE filing
2-Minute Summary
✦ AI-Generated from Full Transcript
Coforge delivered an exceptional Q2 FY26 with 5.9% sequential constant currency growth and 14% EBIT margin, up 251 bps QoQ. Revenue reached $462.1 million, driven by travel (+6.4% QoQ) and other verticals (+5.9%). The company signed five large deals, with total order intake of $514 million and a record executable order book of $1.63 billion, up 26.7% YoY. PAT margin improved to 9.4% of revenue (+275 bps YoY), and free cash flow was $37 million (86% FCF/PAT). Management reiterated a target of 14% EBIT margin for FY26, prioritizing growth over further margin expansion. AI-driven platforms (Code Insight AI, EvolveOps.AI, BlueSwan) are embedding into delivery, boosting revenue per employee to ~$70,000. Risks include wage hike impact in Q3 (100-150 bps margin drag) and potential furloughs in Q4.
कोफोर्ज ने Q2 FY26 में शानदार प्रदर्शन किया। कंपनी की आय (रेवेन्यू) पिछली तिमाही से 5.9% बढ़ी, और मुनाफा (EBIT मार्जिन) 14% रहा, जो पिछली तिमाही से 2.51% ज्यादा है। कुल आय $462.1 मिलियन हुई, जिसमें ट्रैवल और दूसरे क्षेत्रों ने अच्छा योगदान दिया। कंपनी ने पांच बड़े सौदे किए, कुल ऑर्डर $514 मिलियन के मिले, और बकाया ऑर्डर बुक $1.63 बिलियन का रिकॉर्ड स्तर पर पहुंच गया। शुद्ध मुनाफा (PAT) आय का 9.4% रहा, और फ्री कैश फ्लो $37 मिलियन था। प्रबंधन ने FY26 के लिए 14% EBIT मार्जिन का लक्ष्य दोहराया। AI टूल्स से कर्मचारी प्रति आय बढ़कर ~$70,000 हुई। जोखिमों में Q3 में वेतन वृद्धि और Q4 में छुट्टियों का असर शामिल है।
Risks4 trackedTranscriptfull text
Research workspace
Focused Modules
Transcript
Full text
Call Transcript
Full transcript text is available on this route.
Read Transcript →Quarter Snapshot
Sequential constant currency growth
5.9%
+5.9% QoQ
Q2 FY26 sequential constant currency revenue growth, led by travel vertical.
Executable order book (next 12 months)
$1.63B
+26.7% YoY
Record order book reflecting strong deal wins and ramp-up.
Large deals signed in H1 FY26
10
+43% YoY (vs 14 in full FY25)
Already 10 large deals in first half, compared to 14 in all of last fiscal.
Revenue per employee (tech services)
$70,000
+$3,000 QoQ
Annualized revenue per employee, reflecting AI-led productivity gains.
What Changed vs Last Quarter
NEW
H2 FY26 growth to be robust
Management expects H2 to be a growth half over H1, with Q4 traditionally the strongest quarter, supported by pipeline and deal momentum.
NEW
Free cash flow to PAT ratio of 70-80%
On a sustained basis, free cash flow to PAT is expected to be around 70-80%, with focus on maintaining this metric.
NEW
Healthcare vertical to approach $100M run rate
Healthcare book of business expected to be near $100 million by end of FY26, with potential separate reporting from Q1 FY27.
UPDATED
14% EBIT margin target for FY26
Management targets a reported EBIT margin of 14% for the full fiscal year, with Q4 expected to achieve this level despite wage hike headwinds in Q3.
DROPPED
At least 20 large deals in FY26
The company aims to close at least 20 large deals in the current fiscal year, up from 14 in the prior year.
DROPPED
H2 growth stronger than H1
Management expects second half revenue growth to be much stronger than first half due to large deal ramp-ups.
DROPPED
Signiti merger closure by Dec 2025/Jan 2026
The merger with Signiti is expected to close by December 2025 or January 2026, with effective date of April 1, 2025.
NEW RISK
Wage hike margin impact in Q3
Annual wage hike effective October 1, 2025, expected to cause a 100-150 bps margin drop in Q3, partially offset by other levers.
NEW RISK
Furloughs in Q4 could impact growth
Management expects furloughs at the same scale as previous years, which could affect Q4 revenue sequentially.
NEW RISK
EMEA demand recovery still uncertain
EMEA has seen delays and slowdowns in deal sign-offs, though management expects recovery in the next two quarters.
NEW RISK
Hedge losses impacting reported revenue
Hedge losses doubled to INR 307 million in Q2, creating a 150 bps gap between constant currency and dollar revenue growth.
RISK GONE
Macro uncertainty impacting enterprise budgets
Tariff uncertainties and macro volatility continue to cause oscillation in run-the-enterprise budgets, potentially affecting discretionary spending.
RISK GONE
Margin pressure from deal ramp-up and costs
Ramp-up of the largest deal and increased visa costs, subcontractor expenses, and depreciation weighed on margins in Q1; wage hike in Q3 could pose further headwinds.
RISK GONE
Signiti merger timeline uncertainty
The merger closure depends on regulatory approvals, which could slip beyond the December-January timeline.
RISK GONE
Free cash flow pressure from data center CapEx
Higher CapEx for the AI data center deal impacted free cash flow; while management expects normalization, sustained asset-heavy deals could strain cash generation.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q3 FY25
Cigniti merger involves ongoing integration costs; CFO noted expenses were $1.9M in Q3 and expected to decline but could persist.
Mentioned in Q3 FY25, Q4 FY25
ESOP cost expected to reduce by 70-80bps from current 1.8% by Q3 FY26.
Mentioned in Q1 FY26, Q4 FY25
The merger closure depends on regulatory approvals, which could slip beyond the December-January timeline.
Fast read
Guidance and risk preview
Management targets a reported EBIT margin of 14% for the full fiscal year, with Q4 expected to achieve this level despite wage hike headwinds in Q3.
Annual wage hike effective October 1, 2025, expected to cause a 100-150 bps margin drop in Q3, partially offset by other levers.
View Risks →