Coforge Shares Surge 9% on Strong Q3 Earnings

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Coforge Ltd., a leading global IT solutions organization, witnessed a sharp rise in its share price following the announcement of robust third-quarter earnings for FY25.

The company’s stock surged by 9%, reaching a high of ₹8,962 on the Bombay Stock Exchange (BSE) on January 23, 2025.

The market rally came on the back of strong financial results, with Coforge reporting a 5.4% year-on-year (YoY) increase in its profit after tax (PAT), which stood at ₹255.9 crore.

The revenue figures were equally impressive, soaring by 42.8% YoY to ₹3,318.2 crore for the quarter ending December 31, 2024.

Adding to investor optimism, Coforge revealed that it had secured $501 million worth of orders during the quarter.

This marked the second consecutive quarter where the company achieved an order intake exceeding $500 million, underscoring its strong deal momentum and execution capabilities.

Dividend Boost

In a move that further delighted shareholders, Coforge’s board of directors declared an interim dividend of ₹19 per share. The record date for the dividend is set for January 30, 2025, providing an additional incentive for investors.

Operational Highlights

Coforge attributed its stellar performance to increased demand for its digital transformation services across industries such as banking, financial services, insurance, and travel. The company also highlighted significant growth in its European and North American markets.

Strategic Acquisitions Fueling Growth

Coforge’s growth trajectory has been further bolstered by its strategic acquisitions in recent years. In May 2024, the company acquired a 54% stake in Cigniti Technologies, strengthening its capabilities in the Retail, Hi-Tech, and Healthcare sectors.

This acquisition is expected to increase Coforge’s revenue from North America by approximately 33%, further enhancing its presence in this key market.

Coforge and Cigniti are now progressing toward a full merger, with Ernst & Young (EY) and Axis Capital working to finalize the terms. As part of this merger, Coforge will absorb Cigniti Technologies, issuing shares to Cigniti shareholders based on an agreed swap ratio.

Earlier, in April 2021, Coforge acquired SLK Global Solutions, a business process transformation enterprise specializing in financial services, for ₹918.3 crore.

This acquisition expanded Coforge’s BPM operations and strengthened its financial services business, particularly in North America.

Looking ahead, Coforge is actively scouting for further acquisition opportunities in areas such as data, cloud, healthcare, and “low-code no-code” platforms.

CEO Sudhir Singh emphasized that financial and cultural alignment are key factors in their acquisition strategy, with several conversations currently underway.

Analyst View

Market analysts have lauded Coforge’s performance, noting its ability to maintain growth despite global economic uncertainties.

“Coforge’s strong revenue growth and sustained order intake signal its robust business fundamentals and growing demand for IT services,” said a Mumbai-based analyst. “The company is well-positioned to capitalize on digital transformation trends.”

Looking Ahead

With a healthy pipeline of deals, continued focus on innovation, and a strategic acquisition strategy, Coforge remains optimistic about sustaining its growth trajectory.

The company’s leadership reaffirmed their commitment to delivering value to shareholders while driving long-term business expansion.

The impressive earnings report, coupled with its strategic acquisitions, cements Coforge’s position as a key player in the IT services space, reinforcing investor confidence in its future prospects.

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