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A source-linked quarter view: reported numbers, management language, guidance, and the risks that should carry forward.
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Revenue
₹2,323 Cr
verified against source
Revenue YoY
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reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Coforge reported a solid Q3 FY24 with organic CC revenue growth of 14.7% YTD and sequential growth of 1.8% CC, despite unusually high furloughs in BFS and a depressed demand environment. The firm signed 3 large deals, taking the 12-month executable order book to $974 million (+15.8% YoY). Adjusted EBITDA margin expanded 39 bps sequentially to 18%, with PAT up 31.5% QoQ to INR 2,380 million. Management expects Q4 margins to improve sharply by 150-200 bps as furloughs reverse and new business ramps up. FY25 margins are guided higher, but revenue growth will be "clawed out" in a still-challenging macro. Key risk: persistent pricing pressure and flattish client budgets could limit growth acceleration.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects to deliver within the annual guidance range of 13%-16% organic constant currency revenue growth, likely near the lower end.
- Q4 margins expected to rise sharply by 150-200 bps from Q3's 18%, driven by furlough reversal and new business ramp-up, targeting exit margin between 19.6% and 20.4%.
- Next year margins will clearly be higher due to offshore mix improvement, SG&A peaking at 15%, and average resource cost tailwinds.
- SG&A as a percentage of revenue is expected to stay at the current 15% level, growing in line with revenue rather than as a percentage.
Risks flagged
- Management acknowledged that pricing pressure remains acute and has been ongoing for five quarters, with no near-term relief expected.
- Budgets for calendar 2024 are not showing any significant uptick over 2023, and management is not baking in any improvement into next year's plans.
- Travel vertical grew only 3% YTD, impacted by budget cuts at a large North American client and a potential merger at another, with no clear recovery timeline.
- An analyst raised the risk of generative AI causing deflationary pressures; management downplayed it but acknowledged the industry concern.
Key quotes
- Despite quarter three being a very tough quarter for the industry, Team Coforge has once again turned in a strong performance.
- We are not baking in any improvement into our next year plans from where things are.
- Execution, execution, execution.
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