Coforge (COFORGE) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 revenue reached INR 41,881 million ($478.2 million), up 28.5% YoY and 5.1% QoQ, with six large deals signed and nine new clients added, driving a 30% YoY increase in the next 12-month order book to $1.72 billion.

• Achieved 4.4% sequential revenue growth in constant currency (CC), with YTD dollar revenue growth at 32.8%.

• Free cash flow for the quarter was $45.7 million, representing 110% of normalized PAT.

• Integration of AI into delivery models and acquisition of Encora to strengthen AI-led engineering and cloud capabilities.

• Global headcount increased to 35,341, with attrition at 10.9%, among the lowest in the industry.

Financial highlights

• Q3 FY26 revenue: INR 41,881 million, up from INR 32,581 million in Q3 FY25, with EBIT margin at 13.4%, up 191 bps YoY but down 60 bps QoQ.

• PAT for Q3 FY26 stood at INR 2,967 million, up from INR 2,559 million in Q3 FY25; excluding exceptional items, PAT was INR 3,641 million, up 71.2% YoY.

• EPS (excluding exceptional items): INR 10.9 for Q3; reported EPS at INR 7.5; nine-month EPS at INR 31.6, up 83% YoY.

• Free cash flow for Q3 FY26 was $45.7 million; working capital cycle at 49 days.

• Gross margin at 32.9%, down 114 bps QoQ and 52 bps YoY.

Outlook and guidance

• Confident of closing FY26 strongly and expecting an exceptional FY27, with robust growth in banking, travel, high-tech, and healthcare.

• EBIT margin guidance for FY26 at 14%, with Q4 targeted at 15%.

• No EPS dilution expected in FY27 post-Encora acquisition.

• High degree of revenue visibility with 94% repeat business and a strong executable order book.

• Board approved a major acquisition of Encora for $2.35 billion, subject to closing conditions.