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View Claim Ledger →Coforge Ltd — 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.
bullish
high
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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.
Promises0 met · 1 missedRisks3 trackedTranscriptfull text
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Risk Intelligence
BFS Vertical Stagnation
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Transcript
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Read Transcript →Quarter Snapshot
Order Intake (Q4)
$648M
+16.4% YoY
Total order intake in Q4 FY26; executable order book reached $1.75B.
Large Deals Signed (FY26)
21
+5 YoY
Includes 11 deals in H2; Q4 alone contributed 5 large deals.
Attrition (LTM)
10.8%
-2.3pp YoY
Among the lowest in the industry; reflects strong employee retention.
Utilization Rate
82.5%
+1.5pp QoQ
Improved sequentially; supports margin expansion without aggressive hiring.
What Changed vs Last Quarter
NEW
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.
NEW
FY27 Standalone EBIT Margin 16.5-17%
Standalone EBIT margin expected between 16.5% and 17% in FY27, excluding Enkora amortization.
NEW
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%.
NEW
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.
DROPPED
14% EBIT margin for FY26
Management reiterated guidance of 14% EBIT margin for full fiscal year 2026, with Q4 expected to deliver 15% EBIT.
DROPPED
Exceptional FY27 growth
Management expects FY27 to be an exceptional year, with continued robust growth driven by large deal pipeline and key account momentum.
DROPPED
No EPS dilution from Encora in FY27
Management confirmed that the guidance of no EPS dilution in FY27 for the combined business remains intact, even after finalizing a term loan instead of QIP.
NEW RISK
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.
NEW RISK
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.
RISK GONE
Encora integration execution
Integration of Encora may face challenges in achieving synergies and margin targets, with integration expenses expected in Q4 and Q1.
RISK GONE
Unbilled revenue and working capital increase
Unbilled revenues increased due to nature of contracts; while management has guardrails, continued rise could pressure cash flows.
🤫 Topics management stopped discussing
Mentioned in Q1 FY26, Q2 FY26, Q3 FY25, Q3 FY26
Management reiterated guidance of 14% EBIT margin for full fiscal year 2026, with Q4 expected to deliver 15% EBIT.
Mentioned in Q1 FY25, Q3 FY25, Q3 FY26
Integration of Encora may face challenges in achieving synergies and margin targets, with integration expenses expected in Q4 and Q1.
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, Q2 FY26
On a sustained basis, free cash flow to PAT is expected to be around 70-80%, with focus on maintaining this metric.
Mentioned in Q2 FY25, Q2 FY26
Management expects furloughs at the same scale as previous years, which could affect Q4 revenue sequentially.
Fast read
Guidance and risk preview
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.
BFS revenue grew only 12% in FY26, stuck at ~$120-123M for five quarters due to a large client account issue.
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