Coforge reports solid Q2 earnings
Midcap IT services provider Coforge reported robust earnings in the September quarter. Both revenue growth and operating margins were ahead of the Street’s expectations.
On a sequential basis, its dollar revenue grew 7.4% to $212.8 million. In constant currency terms, revenue increased by 3.9% sequentially.
Ebita margins (pre-RSU) increased by 250 basis points (bps) sequentially to 18.6%. One basis point is one hundredeth of a percentage point.
Coforge’s margin growth was driven by multiple
initiatives including higher offshore revenue, improved utilisation, flattening of
pyramid due to hiring at bottom of pyramid and operating leverage. Going ahead, the company expects margins to improve for the rest of the financial year as well. The Company is confident of delivering Ebitda margin of 19% in FY22, with an over 100bps sequential expansion in 3Q, followed by a further expansion in 4QFY22.
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