Key Takeaway: Coforge’s Q1 FY26 saw both record revenue and profit, but missed analyst estimates, triggering a sharp stock selloff—despite strong year-over-year growth.

In July 2025, Coforge, a leading global IT services provider, released its Q1 FY26 financial results. While the company reported robust double-digit growth in profit and revenue, the results unexpectedly fell just short of lofty market expectations, sparking an immediate and sizable decline in the company’s share price.

In this article, we’ll break down the key numbers, examine why investors were disappointed despite impressive headline growth, and explore what might come next for Coforge and its shareholders.

Q1 FY26 Financial Results: The Highlights

Metric Q1 FY26 Change (YoY)
Revenue ₹3,689 crore ↑56.5%
Net Profit After Tax (PAT) ₹317 crore ↑138.4%
EBITDA Margin 17.5% +0.6pp
Order Wins (Total) $507 million N/A
12-Month Order Book $1.54 billion ↑46.9%
Dividend Declared ₹4 per share —
Headcount 34,187 +1,164
  • Significant growth—both in revenue and profit, with PAT more than doubling YoY.
  • Record deal pipeline, with order wins and a robust executable order book.
  • Interim dividend is a boost for investors seeking steady payouts.

Stock Market Reaction: Why Did Coforge Shares Fall?

Coforge shares fell nearly 9% intraday after the Q1 results—despite impressive growth.
  • Immediate impact: Coforge’s shares tumbled, hitting as low as ₹1,684 during the session, down nearly 9% from the previous close.
  • Why? The main cause was not the pace of growth, but rather that profits missed consensus analyst forecasts (expectations were for at least ₹335 crore net, but delivered was ₹317 crore).
  • Margins narrowed slightly, raising concerns over costs and pricing pressure, despite overall expansion.
  • Order wins—while large—were sharply lower than the previous quarter when unusually high deals (like the $1.6B Sabre deal) boosted numbers.
  • Peer pressure: The overall IT sector has been experiencing valuation corrections, amplifying the effect of even slight estimate misses.
Coforge Share Price vs. Quarterly Profit
Line chart comparing Coforge’s Net Profit and Share Price over five quarters Share Price (₹) PAT (₹ Cr) 1600 1800 2000 2200 50 150 250 350 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25
● Share Price  |  ● Net Profit
Note: Sharp drop in price (Q1’25) even as profit peaks.

What Drove Coforge’s Q1 Growth?

  • Strong performance in travel, tourism, and hospitality: The ramp-up of the massive $1.6B Sabre deal contributed to a 31% sequential growth in this vertical.
  • Digital transformation, AI, and specialized offerings were cited as key drivers across client portfolios.
  • Deal pipeline: While order wins this quarter were lower than the previous one, the overall 12-month executable order book reached a company record of $1.54 billion.
  • Geographical expansion: New client wins in North America and Europe provided additional resilience.
  • Hiring: The company increased headcount by 1,164, building capacity for future growth.
Coforge’s successful execution of AI-led services and proprietary platforms is strengthening its global presence and deepening client relationships.

The Road Ahead: Challenges and Opportunities

  • Headwinds:
    • Margin pressures due to rising costs and wage inflation.
    • Order wins fell versus Q4, reflecting normalizing after the Sabre deal surge.
    • Peer IT stocks are correcting, making investors more sensitive to estimate misses.
  • Opportunities:
    • Long-term, the strong digital transformation pipeline and robust executable order book set up promising multi-quarter growth.
    • AI and automation-based offerings showing early traction and may contribute to higher margins over time.
    • Dividend payouts continue to make Coforge a compelling play for income-focused investors.
  • Investor takeaway: The recent dip may offer an entry point, provided investors have a long-term perspective and can digest near-term volatility.
The next few quarters will be critical as Coforge must balance growth initiatives with margin management to regain market favor.

Frequently Asked Questions (FAQ)

  • Despite solid profit and revenue numbers, investor expectations were high and net profit came in below consensus analyst forecasts. Additionally, margins narrowed slightly and deal wins, although robust, were lower than last quarter’s all-time high. This led to rapid profit-taking and sentiment-driven selling.
  • The $1.6 billion Sabre deal was central to the surge in travel, tourism, and hospitality vertical performance, boosting sequential growth significantly. However, it also created tough comparisons for future quarters.
  • For investors with a long-term outlook, Coforge’s large executable order book, AI-led solutions momentum, and sustained dividend potential continue to make it attractive. However, near-term volatility due to sector rotations and macro conditions may persist.
  • Risks include margin pressure from wage and cost inflation, competitive pricing, client concentration from mega-deals, and global macro uncertainty impacting IT spending. Investor attention will remain focused on order inflow and profitability metrics.