Coforge’s Q1 FY26 Q1 results: strong revenue, rising profits, massive $1.55B order book—but a stock dip spooked investors. Expert breakdown.
Ever felt excited by a big rally, only to end the day disappointed? That’s exactly how many investors felt with Coforge’s Q1 FY26 earnings. Headlines praised sharp growth—but the stock dropped nearly 8%. If you were in that trade, you’re probably wondering: What really happened? And is the future still bright?
In this deep-dive (with the hitting early), we’ll unpack the numbers, decode the deal flow, dig into margins, and hear straight from one of India’s nimble IT firms. Think of this as your expert friend, walking you through the boardroom drama, the street-side reactions, and what it all means for your portfolio.
📈 1. Revenue & Profit: Strong, Yet Underwhelming?
The Numbers Behind the Rumble
Coforge reported Q1 FY26 consolidated revenue of ₹3,689 crore, up 8.2% QoQ. In dollar terms, the growth was an even stronger 9.6% sequential rise The Financial Express+6Stock Markets+6mint+6Motilal Oswal. Profit soared to ₹317 crore, up 21.5% QoQ and a whopping 138% YoY Stock MarketsThe Economic Times. That kind of year-over-year surge reads like a blockbuster.
Missing the Analyst Boat
But—and it’s a big but—analysts were expecting more. Bloomberg consensus pegged profit at around ₹335 crore and revenue at ₹3,723 crore The Economic TimesCoforge. That miss—though modest in absolute terms—spooked the market.
🧠 2. Margin Watch: Healthy, But Not Stellar
EBITDA in Focus
EBITDA margin came in at 17.5%, up 61 bps QoQ Coforge+14Stock Markets+14The Economic Times+14. That’s solid—but not enough to override the revenue shortfall.
The Big Picture
Margins help cushion earnings, and an uptick shows discipline. Yet, short-term investor sentiment often prioritizes topline beats—and that’s where Coforge just missed the mark.
🤝 3. Deal Pipeline: The Real Hero
Order Intake & Book
This is where confidence shines. Coforge secured $507 million in new deals this quarter, vaulting its 12-month executable order book to $1.55 billion, up 46.9% YoY NDTV ProfitCoforge+15Stock Markets+15The Financial Express+15. That’s a vivid signal: they’re not just surviving—they’re thriving.
Geography & Sectors
Five major deals across North America, the UK, and APAC highlight diversification and relevance across verticals idbicapital.com+3Stock Markets+3The Financial Express+3. In an uncertain world, Coforge’s booking engine is humming.
👥 4. Employees & Attrition: Standing Strong
- Net headcount increased by 1,164, swelling the workforce to 34,187 The Economic Times+11Coforge+11NDTV Profit+11Moneycontrol.
- Attrition remained steady at 11.3%—remarkably low in IT—highlighting employee satisfaction The Economic TimesMotilal Oswal.
When talent sticks and grows, the delivery engine stays strong—crucial for a services-heavy business.
🧬 5. AI & Innovation: Not Just Buzzwords
Coforge is pushing hard into AI and GenAI:
- Launched platforms like AgentSphere and Forge‑X, targeting healthcare, travel, financial services stockaxis.comCoforge+1idbicapital.com+1.
- Partnered with Zscaler on secure A2A services through Azure Marketplace Stock MarketsThe Financial Express.
In short: they’re building tomorrow’s tools, not just delivering today’s projects.
💸 6. Dividend & Buyback
An interim dividend of ₹4 per share, record date July 31, signals shareholder-friendly governance Coforge+10Stock Markets+10Coforge+10. That’s a small but meaningful reassurance amid market volatility.
📉 7. Market Reaction: The Dip Explained
Despite strong fundamentals:
- Stock dropped ~8% intraday, closing near ₹1,702 The Economic Times.
- Broad IT index fell ~1% alongside Persistent Systems, but Coforge suffered more The Economic TimesThe Financial Express.
Why so steep? Two reasons:
- Missed estimates: In growth-driven sectors, missing consensus—even slightly—can trigger outsized reactions.
- Investor sentiment: In recent months, Coforge has rallied (~44% YoY gain) The Economic TimesThe Financial Express. A minor pause is healthy—and inevitable.
📊 8. Broker Views & Targets: Upbeat Outlook
Morgan Stanley, Motilal Oswal, and others have plastered “Buy” ratings with hefty targets:
- Morgan Stanley: ₹11,500 (largest-ever Sabre deal to add $80–120 million in FY26) The Financial Express+2Stock Markets+2The Economic Times+2
- Motilal Oswal, Jefferies, Nomura: bullish based on large deal pipeline, FY26 ~20% revenue expectations Stock Marketsidbicapital.com
Consensus remains that Coforge is mid-cap IT with large-cap ambition.
🧭 9. Headwinds & Risks
Every story has two sides:
- Macro pressures: Trade tariffs, global slowdown, discretionary budget cuts may hit project timing The Financial ExpressThe Economic Times.
- Execution risk: Large AI contracts need smooth rollouts and ROI delivery; any hiccup could hurt next-quarters.
🧾 TL;DR: Key Takeaways
✅ Strengths:
| Area | Highlights |
| Revenue & Profit | QoQ & YoY growth, though below estimates |
| Margins | Improving EBITDA shows fiscal discipline |
| Deals | $507M intake, $1.55B executable—rock-solid bookings |
| Attrition | Low, indicating stable culture |
| Innovation | AI investments and platform play |
⚠️ Cautions:
- Slight miss in topline/profit triggered correction
- Macro and execution challenges loom
🧠 Section Takeaways
Revenue & Profit
Strong growth, but investor anticipation is elevated—beat or risk a dip.
Margins
Improvement reveals operational strength; margin discipline matters.
Deal Pipeline
Massive bookings are Coforge’s real core strength; runway seems long.
Employees
Stable and growing workforce equals resilient engine.
AI Strategy
GenAI isn’t chatter—it’s becoming core to Coforge’s offerings.
Market Mood
Short-term dips vs. long-term traction—a dance of sentiment.
🤔 What Should Investors Do?
- Long-term bullish: If you believe in Indian IT’s growth story, Coforge is a mid-cap with serious upside—$1.55B bookings and AI curves.
- Short-term cautious: Keep an eye on execution timelines, macro turmoil, and next-quarter delivery.
For new investors: consider staggered buys across dips. For existing holders: patience pays when the build-up is real.
🔮 What to Watch Next
- Q2 Guidance: Margin trends, headcount, bookings update
- Deal Progress: Delivery milestones on large AI contracts
- Macro Outlook: Tech spend from US/Europe remains crucial
✅ Your Call to Action
What part of the story resonates more—massive deal pipelines or the recent pricing hiccup? Planning to buy, hold, or sell? Share your thoughts below 👇
Did Coforge beat Q1 FY26 estimates?
No, Coforge fell short of Bloomberg consensus with net profit ₹317 cr vs ₹335 cr expected.
Why did the stock drop despite revenue growth?
Investors reacted to the earnings miss and future delivery concerns.
How big is Coforge’s order book?
Its 12-month executable order pipeline stands at $1.55 billion—up nearly 47% YoY.
What’s its latest EBITDA margin?
Coforge delivered a 17.5% EBITDA margin in Q1, up ~60 bps QoQ.
Should I buy Coforge shares now?
For long-term growth believers—with GS books, stable margins—it may be worth accumulating cautiously.