Coforge Shares Fall 5% After Q1 Profit Misses Estimates, Margin Contracts

Coforge Shares Fall 5% After Q1 Profit Misses Estimates, Margin Contracts

July 24, 2025 — Shares of Coforge Ltd. dropped nearly 5% in Thursday’s trading session after the company released its Q1 FY26 results. While the firm reported strong revenue growth and significant deal wins, its profit and margins came in below market expectations, leading to negative investor sentiment.

Revenue Grows, But Profit Falls Short

Coforge posted revenue of ₹3,689 crore, marking a 56.5% increase year-on-year and 8.2% growth quarter-on-quarter. However, the net profit stood at ₹317 crore, which fell short of the estimated ₹335 crore.

The profit miss raised concerns among investors, despite overall growth in operations.

Margins Under Pressure

The company’s EBIT margin dropped to 11.3%, down from expectations of around 13.5%. This margin contraction suggests rising operating costs or pressure on pricing, both of which impacted overall profitability.

Strong Deal Wins and Order Book

Coforge maintained strong business momentum by signing $507 million in new deals this quarter. The company's executable order book reached $1.55 billion, a 47% increase over the same period last year.

Dividend Announcement

The board declared an interim dividend of ₹4 per share, with the record date set as July 31, 2025. This is seen as a positive move to reward shareholders.

Market Reaction

Following the results, Coforge’s stock fell to the ₹1,740–₹1,750 range. The miss on profit and margins overshadowed strong top-line growth and order wins, prompting investors to take a cautious stance.

Conclusion

Coforge’s Q1 results showed strong revenue and future business potential through major deal wins. However, lower-than-expected profits and shrinking margins triggered a 5% fall in share price. Going forward, investors will closely watch how the company manages profitability while maintaining growth.