Coforge Share Price After Q1
FY26 Results: Despite Solid Growth, Stock Falls 5%
Coforge,
the midcap IT company, saw its shares
tumble over 5% on July 24, 2025, despite reporting a strong performance in its Q1 FY26 results.
The stock dropped to ₹1,743 in
early morning trade, catching investors by surprise. At the same time, global
brokerage Morgan Stanley maintained its
Overweight rating and expressed long-term confidence in the company.
Let’s dive deeper into what happened, what the numbers say, and why this high-performing IT stock still fell on a strong earnings day.
Key Highlights of Coforge Q1 FY26 Earnings
Coforge managed to outperform its larger rivals in the IT space by reporting 8% revenue growth in constant currency (CC) terms for the April–June quarter. This was much stronger than Persistent Systems’ 3.3% and LTIMindtree’s 0.8% CC growth for the same quarter.
| 🧾 Metric | 📊 Value |
|---|---|
| Revenue (₹) | ₹3,687 crore (↑8.6% QoQ) |
| Revenue Growth (CC) | 8% |
| EBITDA Margin | 17.5% (↑60 bps QoQ) |
| EBIT Margin | 13.2% (flat QoQ) |
| New Deal Wins | $507 million |
| Order Book (12-month) | $1.54 billion (↑3% QoQ, ↑44% YoY) |
| Travel & Hospitality Growth | ↑31% QoQ |
| BFSI Growth | ↓1.1% (Banking), ↑1% (Insurance) |
Despite these strong numbers, the stock market didn’t react positively and there are some understandable reasons behind the drop.
Coforge Stock Tanks 5%: Why Did This Happen?
At around 9:45 AM, Coforge shares were trading at ₹1,747, a 5.5% drop from the previous close on the NSE. This decline
stood in contrast to the company’s strong quarterly growth and high margin
performance.
So why did the stock fall?
1. Sharp Drop in Deal Wins
Coforge won
deals worth $507 million this quarter, down significantly from $2.1 billion in Q4 FY25. While the previous quarter’s
number was inflated by the one-off Sabre
mega deal, the sharp drop in comparison likely raised some eyebrows
among investors.
2. BFSI Segment Weakness
The banking
and financial services (BFS) vertical a major revenue contributor for
most IT companies saw a 1.1% decline
this quarter. The insurance segment
grew modestly by 1% in US dollar terms,
indicating muted demand.
3. Profit Booking
Coforge stock had already rallied over 23% in the past three months. This rally may have encouraged short-term investors to book profits after the earnings report, despite the positive outlook.
Travel and Hospitality Drive Growth
The big winner for Coforge this quarter was
its travel, transportation, and
hospitality (TTH) vertical, which saw a massive 31% sequential growth. This was primarily driven
by the ramp-up of the $1.6 billion Sabre
contract signed earlier.
This strong momentum helped offset the weakness in BFSI and contributed significantly to the overall revenue growth.
Margin and Profitability Performance
Coforge has also shown solid improvement in profitability. The
company’s EBITDA margin rose by 60 basis
points (bps) to 17.5%,
while EBIT margin remained steady at
13.2%.
These numbers suggest that Coforge is not only growing but also maintaining cost discipline and managing operations efficiently—key indicators for long-term investors.
Order Book Growth: Bright Spot in Q1
Though deal wins were lower than the previous
quarter, the company’s executable order
book for the next 12 months rose to $1.54 billion. That’s an increase
of:
·
3%
quarter-on-quarter (QoQ)
·
44%
year-on-year (YoY)
This shows that the pipeline of work remains strong, and the company has enough visibility on revenues going forward.
Coforge vs Peers – How It Stacks Up
| 🏢 Company | 📈 CC Revenue Growth (Q1 FY26) |
|---|---|
| Coforge | 8% |
| Persistent Systems | 3.3% |
| LTIMindtree | 0.8% |
Coforge clearly outperformed its peers in terms of top-line growth, highlighting its strong execution and client delivery.
Investor Takeaway: Should You Worry?
The sharp drop in share price may look
alarming, but here’s what long-term investors should focus on:
Strong travel and hospitality growth
Healthy margin improvement
Robust executable order book
Outperformance vs. industry peers
The weakness in BFSI and lower deal wins are concerns, but they seem more cyclical than structural. With big deals like Sabre still in the pipeline, Coforge’s medium- to long-term outlook remains solid.
Stock Performance Snapshot
| Metric | Value |
|---|---|
| Current Price | ₹1,747 |
| Intraday Fall | -5.5% |
| 3-Month Return | +23% |
| 1-Year Return | +42% (Approx.) |
| Analyst Rating | Overweight |
| Target Price | ₹1,880 (Morgan Stanley) |
Conclusion
Coforge’s Q1 FY26 results tell a story of resilience and strength,
even in a challenging global IT environment. The drop in share price appears temporary, and largely
driven by deal base effects and short-term market behavior.
If you’re a long-term investor, these results show underlying strength in operations, deal execution, and client relationships with ample room for recovery and upside.
Disclaimer:
This article is for educational and informational purposes only. The views expressed are not investment advice. Please consult a qualified financial advisor before making investment decisions.
