Coforge (COFORGE) Q2 24/25 earnings summary

Executive summary

• Q2FY25 revenue reached INR 30,623 Mn ($369.4 Mn), up 34.5% YoY and 27.5% QoQ, with a $1.5 billion run rate achieved seven quarters after crossing $1 billion.

• Adjusted EBITDA margin was 16.5%, up 26.7% YoY, with normalized PAT up 35.6% YoY to INR 2,552 Mn.

• Order intake was $516 million, with a next twelve months signed order book up 40% YoY to $1.3 billion, and three large deals signed.

• Global headcount increased to 32,483, including 4,430 from Cigniti, with attrition stable at 11.4%-11.7%.

• The Cigniti acquisition and integration contributed Rs 4,992 Mn in revenue and Rs 362 Mn in profit after tax for the post-acquisition period.

Financial highlights

• Quarterly revenue was $369.4 million, up 26.3% in constant currency, 26.8% in USD, and 27.5% in INR sequentially.

• Adjusted EBITDA for the quarter was INR 5,063 Mn (16.5% margin), up 26.7% YoY; EBITDA in USD was $58.4 million, up 17.6% sequentially and 37.6% YoY.

• Normalized PAT (excl. minority) was INR 2,552 Mn, up 35.6% YoY; basic EPS (INR) was 30.3, up 45.1% YoY.

• Gross margin was 32.4% in Q2FY25, down 58 bps YoY; organic gross margin for H1 FY25 improved by 64 bps to 32.2%.

• Cash and cash equivalents as of September 30, 2024, were Rs 14,935 Mn, with net cash $80 million and $86 million in working capital debt.

Outlook and guidance

• Strong executable order book for the next 12 months at $1,305 million, up 40% YoY, supporting future revenue visibility.

• Cigniti standalone EBITDA margin target raised to 18%+ by Q4 FY25.

• Medium-term guidance to reach $2 billion revenue and further expand EBITDA margin remains intact.

• Furloughs in Q3 expected to be in line with normal trends.

• Results for the current quarter are not directly comparable to previous quarters due to the Cigniti acquisition.