Coforge Ltd — Q4 FY24
Coforge reported a strong Q4 FY24 with PAT up 94.8% YoY to INR 2,237 million, driven by robust order intake of $774 million and a record executable order book of $1.02 billion.
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
71%Questions answered3Evaded / deflected12Questions auditedContradictedNumbers vs filing
Answered
High priority
Will coordination with Cigniti's sales be restricted until delisting?
Asked by Ravi Menon, Macquarie
Management gave a clear timeline and process for when synergies can start.
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Question
Sudhir, you know, first question is on the Cigniti acquisition. You know, you talked about how this will add geographic presence to your sales team, but wouldn't coordination with that sales or access to those clients be restricted until you complete the delisting process of Cigniti?
Saurabh Goel, CFO
So, Ravi, this is Saurabh. So, see, the closing will happen when the CCI approval comes in. We expect the CCI approval to come in around 45-50 days. And once the CCI approval is done, we'll take control, we'll take board control, and post that, the synergies can be brought in.
Answered
High priority
Will the acquisition distract from organic growth momentum?
Asked by Manik Taneja, Axis Capital
CEO directly stated no impact and provided supporting data.
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Question
But just to step back on the organic business side, do you think some of the distractions around the size of the acquisition and the different streams impact our organic growth momentum?
Sudhir Singh, CEO
As far as the size of the acquisition is concerned and the impact on the organic, growth of the firm, we believe it will have no impact. We're coming in with very significant tailwind. We are coming in off a quarter where the order intake has been $774 million.
Answered
High priority
Will margin expansion be organic or from Cigniti?
Asked by Manik Taneja, Axis Capital
CEO clearly attributed most margin expansion to organic efforts.
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Question
Will that largely be led by organic margin expansion or basically the Cigniti portfolio, given the fact that Cigniti's margin profile is lower than ours?
Sudhir Singh, CEO
Most of it will be organic. Our effort will be to make sure that while the PAT is the same for Cigniti, even the EBITDA over time with the AI-led offering starts replicating the Coforge EBITDA.
Evasive
High priority
What is the organic growth guidance for FY25?
Asked by Vibhor Singhal, Nuvama Equities
CEO did not give a specific growth number, only referenced order book correlation.
no explicit guidancepointed to order book correlation
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Question
So what are—what is the kind of organic growths that we are looking in FY 25? I'm sorry if I missed that in the remarks or in somewhere in the press release, but I couldn't find the kind of—I mean, the any specific guidance for FY 25, organically, that we are looking for.
Sudhir Singh, CEO
We believe realized revenue in FY 2025, therefore, should also be reasonably closely or very closely correlated to these two numbers, 20.7, 17.3, that I talked about.
Answered
High priority
What is the ESOP impact on reported EBITDA margins?
Asked by Vibhor Singhal, Nuvama Equities
CFO gave specific bps impact and clarified flat margins.
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Question
But at the reported EBITDA level, what is the kind of, let's say, impact that we are expecting on a Y on Y basis from the new ESOP scheme and the continuation of the old ESOP scheme?
Saurabh Goel, CFO
We're expecting that at a reported EBITDA level, the margins to remain flat because the new ESOP scheme will come at, for the first year, which is FY 2025, come at 50-60 basis points higher than the current year.
Answered
High priority
Is there risk of revenue cannibalization from Gen AI in Cigniti's testing?
Asked by Sandeep Shah, Equirus Securities
CEO acknowledged the risk and explained how it was factored in.
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Question
But during times Gen AI, which is on the start of scale-up and BPO and the testing other two services, which would be disrupted significantly. So are you counting a risk to the Cigniti's revenue cannibalization?
Sudhir Singh, CEO
We've absolutely baked in the fact that the functional testing area is likely to be disrupted because of AI coming in. At the same time, the non-functional testing areas... have very significant upsides.
Evasive
High priority
Why no quantitative growth guidance this time?
Asked by Sandeep Shah, Equirus Securities
CEO denied client issues but did not provide a specific growth number.
no explicit guidancepointed to order book correlation
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Question
Why this time you are migrating, not giving a quantitative growth guidance? So is it some client-specific issues are you worried about, or this is nothing to do with that and, the performance could be almost similar to what we have seen in FY 2024?
Sudhir Singh, CEO
There is absolutely no client-specific issue that we are concerned about. ... We are, in effect, offering an indirect pointer to the confidence by pointing you to order executable movement and the linkage that it's had over the last seven years with revenue recognition with realized revenue.
Answered
High priority
Why did gross margin expansion not materialize?
Asked by Dipesh Mehta, Emkay
CFO explained the reason for margin miss clearly.
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Question
At the beginning of year, I think, we indicated about 50 BPS expansion at gross level. It didn't materialize, which partly reflect into your EBITDA margin mix also, flattish versus, slightly lower kind of thing. So can you help us understand what played out?
Saurabh Goel, CFO
The environment continued to be tough through the year. ... the new business that came in through the year came in at a much lower margins, purely because of the lower demand that was there in the market.
Partial answer
High priority
What kind of large deal was the $400 million BFSI deal?
Asked by Abhishek Kumar, JM Financial
CEO described deal types but did not explicitly categorize the $400M deal.
did not specify the $400M deal type
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Question
First question is on, on the large deal in BFSI. You know, $400 million, probably a deal that large cap would be proud of. I just wanted to understand, you know, what kind of deal, these are in terms of, you know, whether it's RFP, whether it is proactive, pursuits.
Sudhir Singh, CEO
The wins have been a mix of EE, EN, and NN. The $55 million deal in the current quarter that I talked about is a complete NN deal, and that's $55 million over three years alone.
Evasive
High priority
Why no definitive growth guidance this time?
Asked by Sudheer Guntupalli, Kotak Mahindra
CEO cited uncertainty but did not provide a specific growth number.
no explicit guidancepointed to order book correlation
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Question
This time it's a little surprising and curious to understand why you're not coming out with a definitive growth guidance. Like asked by Sandeep earlier, are there some uncertainties which are holding you back?
Sudhir Singh, CEO
That's why we're pointing to order executable, and the fact that over a seven-year period, that's had a very strong tie-in to the revenue recognized. Hence, hence, hence the change, largely driven by the uncertainty that that is there in the environment.
Answered
Medium priority
How to gain comfort on Cigniti's revenue quality given long tail?
Asked by Kawaljeet Saluja, Kotak Securities
CEO explained due diligence process and focus on scalable relationships.
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Question
Now, typically, you know, such long tail of business is not associated with, you know, appropriate depth and, you know, quality of revenues. So how does one, gain comfort, you know, around the quality of asset acquired?
Sudhir Singh, CEO
When we looked at Cigniti closely, we were focused on the number of relationships that can scale up beyond $10 million in the short term... we had engaged Bain with the kind of feedback that exists about this asset.
Answered
Medium priority
Why is executable order book not moving up sharply despite strong deal wins?
Asked by Manik Taneja, Axis Capital
CFO explained that the large deal was a long-term renewal, not a new executable order.
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Question
What we've seen is that we've seen a very solid order intake in the current quarter, but when I look at the executable order book, that number essentially isn't moving up very sharply. So just to clarify any question, if the deal wins in the current quarter essentially are largely expansion of existing scope?
Saurabh Goel, CFO
So, see, when you look at our order intake in the current quarter, large deal, that is obviously for a longer period. ... We were able to kind of make sure that they don't get even a small pie of the overall contract, and we're able to lock it in.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Cigniti EBITDA around 14.5% | 14.5% | 17% | Understated vs filing |
| Cigniti PAT at 10% | 10% | 229% | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.