Coforge Q4 net profit drops 45%; full year revenue crosses $1 bn mark

BENGALURU (Reuters) – Indian IT services company Coforge Ltd’s fourth-quarter revenue and revenue growth forecast for fiscal 2024 were roughly in line with analyst estimates, in contrast to weaker-than-expected forecasts from its larger peers.

Coforge shares were up 1.4% at midday Thursday, compared to a 0.8% gain in the Nifty IT index, while the benchmark Nifty 50 index was up 0.18%.

India’s three largest IT firms – Tata Consultancy Services Ltd, Infosys Ltd and HCL Technologies Ltd – said their clients in the US and Europe were delaying deals and even curtailing or canceling orders due to the turbulent macroeconomic environment.

The revenue growth forecast for Infosys and HCLTech for the year ending March 2024 was in the single-digit percentage growth range and below market expectations.

However, Coforge said it expects full-year revenue growth of 13% to 16% in constant currency terms, supported by a strong pipeline of deals, while analysts expected growth of 16%, in rupee terms, according to Refinitiv data.

Revenue growth in the fourth quarter of 24.5% to 21.70 billion rupees ($266 million) was in line with analyst estimates.

This helped deliver revenue growth for the year 2023 of 22.4%, exceeding its guidance of 22%.

“Our performance heading into FY24 positions us well for strong growth,” said Chief Executive Officer Sudhir Singh.

Its consolidated net profit fell to 1.15 billion rupees from 2.08 billion rupees a year earlier due to a 30.4% jump in total expenses, mainly on employee benefits, and 523 million rupees one-off due to the abortion of fund-raising plans due to turbulent US market conditions.

Coforge said it had $301 million in orders in the quarter, flat compared to last year. ($1 = 81.6490 Indian rupees)

(Reporting by Ashna Teresa Brito in Bengaluru; Editing by Savio D’Souza)