Coforge Q4 FY26: Profit up 145%, stock jumps 10%

Market reaction: Coforge rallies in early trade

Coforge Ltd shares surged in early trade on Wednesday, May 6, after the mid-tier IT services firm reported a strong March-quarter performance. The stock climbed as much as 10% to ₹1,285.60 on the NSE, hitting the upper circuit during the morning session. Trading later resumed after the exchange revised the upper circuit limit to ₹1,344 per share. Around 09:48 AM, the stock was trading near ₹1,268, up about 8.5% from its previous close of ₹1,168.80. Another market update also pegged the stock around ₹1,263.60, up 8.11% in morning trade. The rally came even as the broader market move was modest, with the Nifty 50 up about 0.45% near 24,141. Despite the day’s rebound, Coforge remained down around 15% over the past year, versus a nearly 1% decline in the Nifty 50.

Q4 FY26 earnings: profit sharply ahead of estimates

Coforge reported consolidated net profit (attributable to owners of the company) of ₹612.3 crore for Q4 FY26, a multifold jump from ₹261.2 crore in Q4 FY25. In percentage terms, the quarter’s profit was also described as up roughly 145% year-on-year in market coverage. The profit figure beat the CNBC-TV18 poll estimate of ₹448 crore, signalling a meaningful outperformance versus Street expectations. Sequentially, one report said net profit rose to ₹612.3 crore from ₹250.2 crore in the December 2025 quarter. The company’s revenue from operations rose 30% year-on-year to ₹4,450.4 crore, compared with ₹3,422.2 crore a year ago. On a quarter-on-quarter basis, revenue was cited as up 5.2% from ₹4,231.5 crore. Alongside the topline rise, total expenses also increased, up 24% year-on-year to ₹3,794 crore from ₹3,060 crore.

Margins, EBITDA and what the quarter signalled

Profitability improvement was a central reason brokerages turned more constructive after the results. One report said EBITDA margin expanded to 16.6% versus 14.6% estimated by the Street. Separate market coverage described an EBIT margin of 16.6% and called it the highest quarterly level for the company. Another note cited EBITDA margin of 20.6% versus 18.3% quarter-on-quarter, underlining how different snapshots focused on different margin lines. Coforge also reported EBITDA of ₹916.8 crore, up 18.5% sequentially from ₹773.6 crore. Management commentary referenced a 370 basis points expansion in EBIT margin alongside 29.2% year-on-year growth entering FY27. The company said it entered FY27 with strong momentum, supported by order visibility.

Order intake, large deals and the 12-month executable book

Operational momentum was also reflected in deal metrics for the quarter. Coforge reported order intake of $148 million in Q4 and said it signed five large deals during the period. The executable order book for the next 12 months rose 16.4% year-on-year to $1.75 billion. Nomura, in its note, also referred to six large deals worth $148 million for Q4, highlighting the same total deal value with a different large-deal count. For investors, the order book figure is a key indicator because it provides near-term revenue visibility, particularly when the sector is closely watched for signs of demand moderation.

One-time and integration items disclosed by the company

A part of the reported profitability was linked to tax and integration items disclosed in filings and media coverage. The company said Q4 FY26 includes acquisition and integration-related expenses for Encora of ₹50.1 crore (₹501 million) and legal expenses related to a cybersecurity case of ₹3.5 crore (₹35 million). It also said the effective tax rate for the quarter was impacted by the release of deferred tax liabilities aggregating ₹181.0 crore (₹1,810 million), recognised in the profit and loss statement pursuant to the merger of Cigniti into Coforge. Another report described the quarter’s PAT as being driven by a major one-time tax benefit alongside strong operational growth. These items were closely tracked because they can affect how investors interpret the sustainability of the quarter’s earnings.

FY26 snapshot: full-year numbers highlighted in reports

Some reports also provided a full-year view of FY26 performance. Coforge’s FY26 revenue was cited at ₹16,420.7 crore (₹1,64,207 million) and $1.87 billion, representing 35.9% growth year-on-year in rupee terms. FY26 EBITDA was reported at ₹3,046.4 crore (₹30,464 million), up 76.9% year-on-year, while EBIT was ₹2,364.5 crore (₹23,645 million), up 82.7% year-on-year. FY26 PAT was cited at ₹1,555.7 crore (₹15,557 million), up 91.6% year-on-year. Management said FY26 delivered 29.2% year-on-year growth and a 370 basis points expansion in EBIT margin to 14.4%. These full-year figures were used by brokerages to frame margin expansion and cash generation alongside growth.

Brokerage stance: upgrades, targets and key arguments

Brokerages largely maintained positive calls after the results, citing margins, cash flow improvement and deal momentum. Nomura reiterated a ‘Buy’ with a target price of ₹2,100, and said revenue was largely in line but margins delivered a significant beat, while raising FY27 and FY28 earnings estimates by around 2-5%. Jefferies retained ‘Buy’ with a target of ₹1,860, stating the quarter’s beat was driven by higher margins and strong free cash flow generation, and raised estimates by 9-11% while projecting a 23% EPS CAGR. HSBC maintained ‘Buy’ with a target of ₹1,710, noting slightly lower revenue versus expectations but improved margin and free cash flow guidance, while cautioning that growth could moderate due to Coforge’s exit from lower-margin segments. Elara Capital upgraded Coforge to ‘Accumulate’ from ‘Reduce’ with a target price of ₹1,380, pointing to stronger growth in healthcare, travel and emerging verticals, while BFSI growth was muted due to a client-specific issue. Choice Institutional Equities reiterated ‘Buy’ with a target of ₹1,900, based on FY28E EPS of ₹67.8, and said margin expansion reflected cost control and early benefits from AI-led efficiency.

Key numbers at a glance

What investors are watching into FY27

Management said Coforge entered FY27 with strong momentum, backed by the $1.75 billion executable order book. The company also indicated it expects robust revenue growth in FY27 and plans to deliver an EBITDA margin of more than 20.5% on a consolidated basis in FY27. At the same time, brokerages flagged near-term factors that could shape the growth trajectory, including the exit from lower-margin India businesses. HSBC, for instance, said growth could moderate due to the clean-up of lower-margin segments, even as order visibility remains supportive. Broker notes also referenced both potential benefits and headwinds tied to AI, including scope for margin improvement through efficiency. Another brokerage view highlighted that demand is shifting from AI experimentation to production-level deployments, while productivity gains are being seen in development and code generation.

Conclusion

Coforge’s Q4 FY26 print combined a sharp profit beat, stronger margins and improved order visibility, triggering a swift re-rating in early trade. Brokerages largely stayed positive, with several reiterating ‘Buy’ and citing the executable order book and cash flow improvement. Investors will track how margins evolve after one-off tax and integration effects, and how growth shapes up as the company exits lower-margin segments. Near-term attention will also remain on deal execution and the company’s stated FY27 plan to deliver consolidated EBITDA margin above 20.5%.