Coforge shares surge 9% on Q3 results, dividend, and acquisition

Coforge Ltd shares surged by 9% on Thursday, reaching a high of ₹8,962 on the BSE. This significant rise comes on the back of the company’s strong Q3 results, a third interim dividend declaration, and the announcement of a strategic acquisition. The stock has already gained 45% over the past year, reflecting strong investor confidence. Such developments underline the growing importance of share market investment for those looking to capitalise on strong corporate performances.

Q3 results highlight consistent growth

Coforge reported a 10.3% increase in net profit for the December quarter, supported by a 42.8% year-on-year (YoY) rise in revenue to ₹3,318.2 crore. In constant currency terms, the company achieved 8.4% sequential growth. Dollar-denominated revenue stood at $397.1 million, marking a 7.5% quarter-on-quarter (QoQ) and a 40.8% YoY increase. EBITDA rose 29.3% YoY and 7.2% QoQ, indicating a healthy operational performance.

The order intake for the quarter reached $501 million, making it the second consecutive quarter to surpass the $500 million milestone. Executable orders now stand at $1.37 billion, a remarkable 40.1% YoY growth. These figures demonstrate the company's ability to consistently secure and execute large deals, particularly in North America and ASEAN regions.

Dividend announcement bolsters investor sentiment

Adding to the positive momentum, Coforge’s board declared a third interim dividend of ₹19 per share, with January 30, 2025, set as the record date for eligibility. This announcement underscores the company’s commitment to rewarding its shareholders. Such dividends often attract long-term investors, further enhancing the appeal of share market investment.

Strategic acquisition to strengthen portfolio

In another strategic move, Coforge announced that its wholly owned subsidiary has agreed to acquire Xceltrait Inc. for $17.85 million. This acquisition is expected to bolster the company’s capabilities and market position in the IT services sector. By aligning with its growth strategy, the acquisition is anticipated to bring synergistic benefits and open new avenues for revenue generation.

CEO’s optimism reflects a strong outlook

Sudhir Singh, CEO and Executive Director of Coforge Ltd, expressed confidence in the company’s future, highlighting the pipeline of large deals and margin improvements. “Sequential growth, expanding margins, and a strong order book give us confidence in sustained growth for the coming year,” he stated.

The company’s net headcount addition of 611 during the quarter brings the total workforce to 33,094, marking a 16% organic growth since the beginning of the year. The regional revenue breakdown was equally encouraging, with broad-based growth across the Americas (69.2% YoY), EMEA (20.5% YoY), and the rest of the world (3.3% YoY).

Conclusion

As of 11 AM, Coforge's stock price reached ₹9221.55, reflecting a gain of 12.11%. Coforge’s strong Q3 performance, dividend declaration, and strategic acquisition have significantly boosted investor confidence, as evidenced by the surge in share price. 

The company’s ability to secure large deals and maintain consistent growth across geographies further solidifies its position as a key player in the IT sector. For investors keen on share market investment, Coforge’s trajectory offers a promising case study in strategic growth and value creation.