Coforge (COFORGE) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue reached $462.1 million (INR 39,857 million), up 31.7% YoY in INR and 26.6% YoY in USD, with 5.9% sequential constant currency growth and 14% EBIT margin.

• Five large deals were signed, driving a record $1.63 billion executable order book for the next 12 months, up 26.7% YoY.

• Headcount reached 34,896 with a net addition of 709 and low attrition at 11.4%, among the lowest in the industry.

• AI-driven transformation is central, with proprietary platforms like Code Insight AI, BlueSwan, and ForgeX enhancing productivity and delivery.

• Board approved unaudited results, declared an interim dividend of Rs. 4 per share, and approved voluntary winding up of two UK subsidiaries for operational efficiency.

Financial highlights

• Q2 revenue was $462.1 million (Rs. 39,857 million), up 4.5% QoQ in USD and 8.1% QoQ in INR.

• EBIT margin improved to 14%, up 251 bps QoQ and 240 bps YoY; PAT margin rose to 9.4%, with consolidated net profit at Rs. 4,254 million.

• EPS for Q2 was INR 11.2 (consolidated, basic), with H1 FY26 EPS at INR 20.7, up 101% YoY.

• Free cash flow reached $37 million, with FCF to PAT at 86%.

• Billed DSO at 63 days, unbilled at 26, contract assets at 15; total working capital cycle at 104 days.

Outlook and guidance

• Management targets at least 14% EBIT margin for FY26 and beyond, prioritizing growth over further margin expansion.

• Free cash flow to PAT is expected to sustain at 70%-80% going forward.

• Demand outlook is positive across banking, insurance, travel, healthcare, and public sector outside India, with healthcare and public sector expected to reach $100M and $200M run rates, respectively.

• H2 and Q4 are expected to be strong growth periods, with robust pipeline and seasonal strength.

• Board notes results are not fully comparable with prior year due to acquisitions and divestitures.