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Revenue
₹2,221 Cr
verified against source
Revenue YoY
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reported change
EBITDA
Pending
latest reported figure
Source
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Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Coforge delivered a solid Q1 FY24 with constant currency revenue growth of 2.7% QoQ and 18.4% YoY, despite a challenging macro environment. Record quarterly order intake of $531 million, including a $300 million TCV BFS deal and a $65 million TCV deal, underpins confidence in the 13%-16% CC revenue guidance for FY24. Adjusted EBITDA margin came in at 16%, down 50bps YoY due to salary hikes, visa costs, and hedge losses, but management reiterated the annual margin guidance of 18.3%. Net headcount increased by 1,000 to 24,224, and attrition fell to 13.3%. The executable order book stands at $897 million, up 19.1% YoY. Key risks include sustained macro uncertainty in BFS and potential deflationary impact from AI on BPO and testing revenues.
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated annual constant currency revenue growth guidance of 13%-16% for fiscal year 2024, supported by record order intake and strong executable order book.
- Management reaffirmed annual adjusted EBITDA margin guidance of around 18.3%, expecting typical quarterly ramp-up from Q1's 16%.
- Management reiterated conviction that gross margin will improve by 50 basis points over FY23 in FY24.
- Management expects full-year operating cash flow to be 70% of EBITDA, in line with historical trends.
Risks flagged
- BFS clients remain in wait-and-watch mode, with discretionary spending deferrals potentially impacting growth if macro conditions worsen.
- Management acknowledged that AI could disrupt BPO and testing revenue streams, though net impact is expected to be positive.
- Q1 margins were impacted by salary hikes, visa costs, and hedge losses; any deviation from expected ramp-up could pressure full-year margin guidance.
- An analyst questioned whether macro uncertainty could cause deal slippages; management expressed confidence but acknowledged the risk.
Key quotes
- Exceptional execution by Team Coforge in a testing environment allowed us to deliver another quarter of sustained, robust and profitable growth.
- We believe that effective application now today of generative AI using large language models, known as LLMs, such as ChatGPT, can drive exponential value for our customers.
- Our confidence doesn't stem from forward-looking plans. It comes from our past record. It comes from the experiences that we as a team have gone through repeatedly over the last six years.
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