Coforge Q4FY26 profit jumps 134%; stock up 11% on results

Stock jumps as results hit the tape

Coforge shares rallied sharply in Wednesday’s session after the mid-tier IT services company reported a strong Q4FY26. The stock rose about 11% to an intraday high around Rs 1,294, as investors reacted to a significant jump in profitability and steady revenue growth. In early trade, the counter also hit an upper circuit level of Rs 1,285.60 on the NSE before trading resumed after the exchange revised the upper circuit to Rs 1,344 per share. Around 09:48 AM, the stock traded near Rs 1,268, up 8.49% from its previous close of Rs 1,168.80. The broader market was supportive as well, with the Nifty 50 up 109 points, or 0.45%, at 24,141.

Q4FY26 profit more than doubles

For Q4FY26, Coforge reported consolidated net profit attributable to owners of the company at Rs 612.3 crore. This was up 134% year-on-year from Rs 261.2 crore in the same quarter last year. On a sequential basis, profit rose 145% from around Rs 250 crore to Rs 612.3 crore. Another data point in the coverage put the December 2025 quarter profit at Rs 250.2 crore, indicating a similar quarter-on-quarter jump. The scale of the profit increase stood out relative to revenue growth, pointing to improved cost control and margin performance during the quarter.

Revenue growth: 30% YoY and 5% sequential

Revenue from operations rose 30% year-on-year to Rs 4,450.4 crore in Q4FY26. On a quarter-on-quarter basis, revenue increased 5.2% from Rs 4,231.5 crore. The company also disclosed growth in multiple reporting currencies: revenue rose 30% YoY in rupee terms, 28.7% in constant currency, and 21.2% in US dollar terms. Sequentially, revenue increased 5.2% in rupee terms. The reported numbers indicated that Coforge continued to grow faster than many large-cap peers, while also expanding profitability.

Margin picture: EBIT at 16.6%, EBITDA up 18.5%

Brokerage commentary flagged a margin beat versus expectations for the quarter. One note cited an EBIT margin of 16.6%, above an estimate of 15% adjusted. Another reference compared the reported 16.6% to a Street estimate of 14.6%. On the operating line, EBITDA rose 18.5% quarter-on-quarter to Rs 916.8 crore in Q4 from Rs 773.6 crore. One report attributed the expansion to multiple levers including SG&A leverage adding 100 basis points, currency tailwinds of 80 basis points, direct cost reduction of 50 basis points, and 40 basis points from lower marketing spends.

Deal wins and order book: key driver of confidence

Coforge reported an order intake of $1.648 billion in Q4, with five large deals. A brokerage note also described order intake as down 69.5% YoY, even as large-deal additions helped sustain near-term visibility. The 12-month executable order book was highlighted at about $1.75 billion, with multiple mentions in the coverage ranging from $1.75 billion to $1.752 billion. Brokerages noted the executable order book rose about 16% year-on-year, supporting expectations of double-digit organic growth. The order book was also discussed as a key cushion while the company exits low-margin parts of its India business.

Management view: momentum into FY27

CEO Sudhir Singh described FY26 as “another year of exceptional performance,” pointing to strong growth and margin expansion. He said that with an executable order book of $1.75 billion, the company enters FY27 with strong momentum. He also said Coforge expects robust revenue growth along with EBITDA margins above 20.5%. Separately, CFO Saurabh Goel said the company guided operating margins for FY27 at 15.5% including the Encora acquisition, and between 16.5% and 17% excluding the acquisition. The CFO also linked margin improvement to using AI at scale, inorganic contribution, and the planned closure of a $1.020 billion low-margin portfolio in the India business.

Brokerages: Buy calls dominate after Q4 beat

Jefferies maintained a Buy rating with a target price of Rs 1,860, implying 60% upside, citing stronger-than-expected margins and better free cash flow conversion. It also raised estimates by 9% to 11% on improved margin outlook and projected a 23% EPS CAGR over FY27 to FY29, while calling valuations at 19x one-year forward PE attractive. Nomura reiterated Buy and raised its target to Rs 2,100, indicating 80% upside. Nomura highlighted six large deals worth $1.648 billion in Q4 and said the executable order book grew 16% YoY to $1.752 billion, adding that framework agreements from US public services were not included in that figure.

Motilal Oswal maintained a Buy rating with a target price of Rs 1,800, implying 54% upside, and highlighted new opportunities in AI as demand shifts from experimentation to production deployments. Elara Capital upgraded Coforge to Accumulate with a target price of Rs 1,380, and flagged that BFSI growth was relatively subdued due to a client-specific issue, while healthcare, travel and emerging verticals were stronger. Nuvama Institutional Equities also maintained a Buy with a target price of Rs 2,200, indicating 88% upside, and said management is focusing more on improving profitability and cash flows alongside growth. Another coverage item noted HSBC maintained a Buy with a target price of Rs 1,710.

Encora acquisition and near-term trade-offs

Nomura said the Encora acquisition, completed in April, is expected to contribute about $1.550 billion in incremental revenue in FY27. It also expects flat sequential growth in Q1 FY27 due to the exit from low-margin India businesses, even as it believes Coforge will outpace industry growth in FY27. Elara factored in an annual loss of $1.040 billion to $1.050 billion due to the exit of a low-margin India business. The common thread across broker views was that the clean-up could soften near-term growth, but potentially improve the quality of revenue and margins.

Key numbers at a glance

Why the move matters for investors

The Q4 result reinforced Coforge’s positioning as a faster-growing IT services player with improving profitability. The stock reaction reflected a combination of profit outperformance, margin strength, and order book visibility. Brokerages also focused on free cash flow conversion and the company’s stated push to improve cash generation. At the same time, multiple reports flagged that near-term growth may look subdued due to the planned exit from lower-margin India business, suggesting that headline growth and quality of earnings may move in opposite directions over a few quarters.

Conclusion

Coforge’s Q4FY26 print delivered a sharp rise in profit to Rs 612.3 crore, revenue growth to Rs 4,450.4 crore, and an EBIT margin cited at 16.6%, triggering a strong stock move during the session. Brokerages largely retained Buy ratings, pointing to a $1.75 billion executable order book and improved margin outlook. Key monitorables for investors include the pace of growth in Q1FY27 amid the exit from low-margin India operations, execution of the order book, and updates on the Encora integration following its completion in April.