Latest news with #Coforge
Mint
a day ago
- Business
- Mint
India gets a new No. 7 IT services company as churn continues
Coforge Ltd is now the country's seventh-largest software services outsourcer by revenue as it toppledMphasis Ltd, reflecting the competition and churn in India's mid-sized information technology segment. Noida-based Coforge, formerly NIIT Technologies Ltd, reported $442 million in revenue for the three months ended June 2025, growing 9.6% sequentially. Bengaluru-based Mphasis's revenue rose 1.6% to $437 million during the first quarter. Coforge has jumped three spots in less than a year. It had nudged ahead ofPersistent Systems Ltd in September 2024, and overtookHexaware Technologies Ltd last December. Growth has slowed for Pune-based Persistent and Mphasis due to client and sector-specific concerns. This is the fifth instance of a change in the pecking order in the country's $283-billion IT industry in less than two years, a period also marked by global uncertainties and caution among clients. Many of the changes in Indian IT's revenue ranking involved mid-cap firms. Analysts at Kotak Institutional Equities expect Coforge will break into the top six, which generate at least $1 billion in revenue annually. 'We believe Coforge will exit FY2026, with a revenue run-rate of US$2 bn and on [a] ttm (trailing twelve months) basis by the June 2026 quarter. This is impressive against the backdrop of the industry slowdown where peers are struggling," said Kotak's Kawaljeet Saluja, Sathishkumar S, and Vamshi Krishna, in a 25 July note. Mphasis ceded ground to Coforge after losing business from Fedex Corp, which is one of its oldest clients and accounted for 8% of its revenue. The company's revenue from logistics and transportation companies fell by almost half to ₹2,171 million (about $25 million) in the June quarter. The big four of the information technology (IT) services sector include Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd andWipro Ltd, which together account for 26% of the Mahindra Ltd andLTIMindtree Ltd are the fifth and the sixth-largest IT outsourcers. Coforge on a roll At the heart of Coforge's growth is the 13-year software product delivery deal with Sabre, a Texas-based travel tech company with a deal value of $1.56 billion and signed in March this year. The company's revenue also got a big boost from its biggest acquisition in May last year, that of Hyderabad-basedCigniti Technologies,a digital assurance and engineering services company. Coforge acquired a 54% stake in the company for $220 million. Even investors are buying into the Coforge story. Its share price has almost jumped fourfold since May 2017, when Sudhir Singh joined as its chief executive, to ₹1,689.35 on Friday's close. By comparison, the benchmark BSE Sensex rose almost threefold to 81,463.09 points during the period. Still, Coforge has its challenges. For one, there was not much cheer on the profitability front as Coforge's operating margins at 13.1% were largely flat on a sequential basis in the first quarter of FY26. Another concern for the company is its free cash flow, or the cash left after operating expenses and capital expenditure. Coforge spent more money than it earned through its operations as negative free cash flow for the quarter totalled $21.5 million. It is optimistic about a turnaround. 'I would expect quarter 2 also to be an equally robust quarter. And H2, just using that term for a third time, should also be a robust second half for us," said CEO Singh during the company's post-earnings analyst call on 24 July. Mid-cap churn Mid-cap companies stay neck-and-neck by revenue. Mint's April analysis revealed that the revenue gap between the seventh and the twelfth-largest IT outsourcers is about $600 million. Persistent Systems, Hexaware and L&T Technology Services ended the June 2025 quarter with a revenue of $389.7 million, $382.1 million, and $335 million, respectively. At the same time,Sonata Software Ltd overtook L&T Technology Services Ltd to become the country's 11th-largest IT services provider. Firstsource Solutions Ltd could be the latest to enter the Indian IT's $1-billion revenue club. The Billionaire Sanjiv Goenka-owned firm ended the January-March period with $250 million in top line, up 0.4% sequentially. If the company generates at least $250 million each in the rest of the four quarters, it would hit $1 billion in yearly revenue. Firstsource has yet to announce its results for the June first quarter of the current fiscal year. Stability at top While the mid-cap IT has seen frequent churn over recent years, the top order is intact. And it's likely to stay stable for some time as the difference in the quarterly revenue of LTIMindtree and Coforge is now $711 million–or about 60% Coforge's current Q1 revenue. The pecking order at the top has been stable since 2018, when HCL Technologies Ltd overtook Wipro Ltd as the country's third-largest IT outsourcer. Even though the second-largest Infosys Ltd and Nasdaq-listed Cognizant Technology Solutions Corp have been edging past each other, the rankings have not changed materially.
Business Upturn
4 days ago
- Business
- Business Upturn
Coforge shares jump nearly 3% after Bernstein maintains ‘Outperform' rating with target price of Rs 2,038
By Aman Shukla Published on July 25, 2025, 09:52 IST Shares of Coforge Ltd climbed close to 3% in Friday's trade after global brokerage Bernstein reiterated its Outperform rating on the stock, setting a target price of ₹2,038. As of 9:51 AM, the shares were trading 2.37% higher at Rs 1,715.80. Bernstein highlighted the company's healthy Q1FY26 performance, with revenue rising 8% sequentially, powered by strong traction in the Americas and its travel-focused vertical. The brokerage said this momentum reflects a solid demand environment and long-term growth visibility. While the EBIT margin for the quarter came in at 13.2%—slightly below expectations by 50 basis points—Coforge's management remains optimistic about hitting a 14% margin target by the end of FY26. This signals confidence in improving operational efficiency going forward. Bernstein also noted that the recent dip in Coforge's stock price has created a compelling entry point for long-term investors, especially as the company continues to benefit from robust digital transformation trends across its key markets. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Ahmedabad Plane Crash Aman Shukla is a post-graduate in mass communication . A media enthusiast who has a strong hold on communication ,content writing and copy writing. Aman is currently working as journalist at
Time of India
4 days ago
- Business
- Time of India
IT sector adds fewer hands; BigBasket's muted financials
IT sector adds fewer hands; BigBasket's muted financials Want this newsletter delivered to your inbox? Also in the letter: Top six IT firms saw staff additions plunge 72% in Q1 Steep decline: Tata Consultancy Services (TCS) and Infosys led what little growth there was, adding of 5,060 and 210 employees, respectively The other four, HCLTech, Wipro, Tech Mahindra, and LTIMindtree, together cut 1,423 jobs. Big picture: Quote, unquote: Also Read: Foot in the door: Also Read: BigBasket loses steam as quick commerce intensifies Driving the news: Tata Sons' FY25 annual report reveals a 3% dip in turnover for BigBasket's business-to-consumer (B2C) unit, Innovative Retail Concepts, which clocked Rs 7,673 crore. Its business-to-business (B2B) arm, Supermarket Grocery Supplies, fared worse, falling 7% to Rs 2,227 crore. Losses for the B2C business widened sharply to Rs 1,851 crore, up from Rs 1,267 crore in FY24. Also Read: Tata 1mg back in investment mode after strong FY25 growth By the numbers: Consolidated revenue jumped 20% year-on-year (YoY) to Rs 2,392 crore. Tata 1mg Technologies, its main entity, posted Rs 375 crore in revenue and Rs 65 crore in PAT (tripling YoY). Subsidiary Tata 1mg Healthcare recorded revenue of Rs 2,016 crore but incurred a loss of Rs 342 crore. Coforge outperforms peers: Net profit is at Rs 317.4 crore. is at Rs 317.4 crore. Revenue surged over 54% to Rs 3,688.6 crore. surged over 54% to Rs 3,688.6 crore. Growth was led by the Americas business, which improved 72.4% from the same period last year. Contrary to top-tier hiring trends, Coforge's global workforce increased by 1,164. Persistent Systems posts profit growth: Net profit was at Rs 424.9 crore, helped mainly by foreign exchange gains. was at Rs 424.9 crore, helped mainly by foreign exchange gains. Revenue increased by 21.8% YoY to Rs 3,335.9 crore. increased by 21.8% YoY to Rs 3,335.9 crore. BFSI grew 30.7% YoY, and software, hi-tech and emerging industries verticals saw a 14.1% YoY surge. Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: Pine Lab's Setu boosts top deck with key senior hires Driving the news: Anand Raisinghani from SAP India has stepped in as the chief executive officer, taking over from cofounder Sahil Kini. Prashanth Nimmagada joined as chief technology officer in April. Santosh Subramanian assumed the role of finance head in March. Nikhil Ratanpal is the director of product development. Setting context: Also Read: SuperK raises Rs 100 crore from Binny Bansal, Mithun Sacheti; cricketer Shubman Gill joins cap table Deal details: The round was led by Flipkart cofounder Binny Bansal's 3State Ventures and CaratLane founder Mithun Sacheti. Existing investors Blume Ventures and Xeed Ventures also participated. Adding a touch of star power, Indian Test skipper Shubman Gill also joined the captable. By the numbers: Keeping Count Other Top Stories By Our Reporters PhysicsWallah's road to IPO: Karnataka tech ecosystem's fundraising plummets: Global Picks We Are Reading Happy Friday! Hiring in India's IT sector declined significantly in the April-June quarter. This and more in today's ETtech Morning Dispatch.■ Setu rejigs top shelf■ SuperK raises funds■ PhysicsWallah IPO gets Sebi nodIndia's $280 billion sector experienced a sharp slowdown in hiring during the April-June quarter, with the top six IT companies adding just 3,847 employees in Q1 represents a nearly 72% drop from the 13,935 additions in the previous are leveraging artificial intelligence (AI) and automation to maintain, or even grow, revenues without increasing say the focus is shifting towards efficiency, digital transformation, and targeted hiring. As business models evolve, companies are investing more in upskilling their workforce and adopting smarter recruitment strategies, they add.'While early indicators for FY26 suggest a cautious rebound—with top IT firms projecting higher fresher intake linked to an increase in the number of projects coming to India, hiring will remain skill-driven and unlikely to return to earlier volumes,' said Neeti Sharma, CEO of Teamlease hiring, once the backbone of IT's pyramid-style staffing, has halved compared to pre-pandemic years, according to Teamlease total, the six forms collectively employ around 16.25 lakh people, which is still below the 16.58 lakh recorded at the end of June Digital-owned BigBasket is feeling the heat as quick commerce players, such as Blinkit, Zepto, and Swiggy Instamart, tighten their grip on urban grocery demand. The pressure is showing in the contrast, Tata Digital's epharmacy arm, 1mg, has bounced back with strong momentum Mid-tier IT company Coforge recorded a 138.4% YoY increase in net profit, with revenue also IT services company reported a 38.7% YoY increase in net profit for the April-June quarter. It was, however, marginally lower than the previous two Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and Reach out to us at spotlightpartner@ to explore sponsorship infrastructure company Setu, owned by Pine Labs, has made significant leadership changes in recent a move to strengthen its executive team, the company appointed several key figures to vital Labs acquired the fintech venture in June 2022. Setu provides a technology stack that allows companies to offer financial services on top of their existing operations. Among its range of products, Setu offers APIs (application programming interfaces) for bill payments, customer onboarding and KYC, payments via UPI, and digital Thontepu (left) and Neeraj Menta, founders, SuperKSuperK, a value-first grocery retailer operating in small towns, has raised Rs 100 crore in fresh funding The retailer grew nearly 15% in FY25, up from Rs 85 crore the previous year. It now targets an annualised Rs 2,000–3,000 crore business in Andhra Pradesh and Telangana alone over the next five years. The latest round values the company at 2–2.5x its previous Rs 160 crore valuation.(L-R) Prateek Maheshwari and Alakh Pandey, founders, PhysicswallahEdtech startup PhysicsWallah has obtained approval from the Securities and Exchange Board of India (SEBI) for an initial public offering, according to a notification on the markets regulator's startups raised $1.7 billion in the first half of 2025 (H1 2025), according to a report by data intelligence platform Tracxn , with Bengaluru-based companies leading. The funding level has fallen 30% from the $2.4 billion raised in the second half of 2024 (H2 2024), and is 44% lower than the $3 billion raised during the same period last year (H1 2024).■ Microsoft put older versions of SharePoint on life support; hackers are taking advantage ( Wired ■ AI 'a great opportunity for artists' says head of Stable Diffusion owner ( FT ■ Unleashing the AI jobs revolution in Africa ( Rest of World
Mint
4 days ago
- Business
- Mint
Coforge, Persistent clocked IT's best show. Here's why the shares crashed still
Coforge Ltd and Persistent Systems Ltd grew faster than their larger peers in the June quarter that was marked by macroeconomic turbulence and demand uncertainty, but each one is grappling with issues of its own. Eighth-largest IT services firm Coforge reported $442 million in revenue in the first quarter, up 9.6% sequentially, whereas ninth-largest Persistent Systems reported $389.7 million, up 3.9% from the preceding three months. Sixth-largest LTIMindtree Ltd was the slowest among the mid-caps, reporting a 1.97% increase in revenue to $1.15 billion. In contrast, three of the largest homegrown information technology (IT) outsourcers including Infosys Ltd, HCL Technologies Ltd, and Tech Mahindra Ltd reported revenue growth between 0.97% to 4.46%. Largest IT outsourcers Tata Consultancy Services Ltd and Wipro Ltd reported a revenue decline of 0.59% and 0.35%, respectively. Billion-dollar club Both Coforge and Persistent are the latest Indian IT companies to clock annual revenue over $1 billion, and grew the fastest among the country's 10 largest tech services firms. Both are expected to grow faster than their larger peers in the current fiscal as well. A common thread is their stable leadership—Sudhir Singh, a former Infosys executive, has been Coforge CEO since May 2017, whereas Sandeep Kalra has been CEO of Persistent since October 2020. In contrast, three of India's top five software services companies underwent a change in CEOs in the past 18 months. For now, much of Coforge's growth came from clients in the travel and hospitality segment, which made up more than three-fifths of the company's incremental revenue of $38 million. Coforge got $101 million from companies in the travel, transport and hospitality space, up 31% sequentially. Notably, this jump in revenue came from the mega deal it won in March. Coforge won a 13-year contract valued at $1.56 billion with Sabre, a Texas-based travel technology company. Coforge is expected to handle the software product delivery for Sabre and will also execute artificial intelligence-led tasks for the company. Discretionary ebb 'Given the proliferation of AI, we see that the discretionary nature of the spend has ebbed," said Sudhir Singh, chief executive of Coforge, during the company's post-earnings interaction with analysts on Thursday. He added that the 'Sabre deal will continue to ramp up sequentially in quarter 2 as well." Singh expects the second half to be better. 'I would expect quarter 2 also to be an equally robust quarter. And H2, just using that term for a third time, should also be a robust second half for us," said Singh, adding that with the advent of AI, clients are trying to optimize their own budgets, 'but are being extremely open to proactive business case-led large solutions." Static sentiment At Pune-based Persistent Systems, the sentiment on the overall environment was unchanged. 'All I can say is the environment has been cautious. Decision-making has been slow," CEO Kalra said during the post-earnings interaction with analysts on 23 July. This caution reflected in the company's revenue growth, which has been declining since June last year. For now, 73% of the company's $15 million incremental revenue came from banks and financial institutions even as clients in the healthcare space dragged down overall growth. Persistent got $99 million from clients in the healthcare and life sciences space. Still, the Persistent management is hopeful. Hoping for better 'If the environment becomes a little bit better and not just for us, for everyone, I think things will be easier," said Kalra. However, at least one brokerage is not. 'Persistent witnessed slower organic growth during 1QFY26, impacted by a slowdown in the Healthcare vertical. For the vertical we build in client-specific impact to weigh in on growth in the near term, leading us to cut our FY26 revenue growth estimate by 2%," said Antique Stock Broking analysts Vikas Ahuja, Rhea Baid, and Divija Parekh, in a note on Thursday. Both companies were profitable last quarter. Coforge and Persistent reported net profits of $38 million and $50 million, up 24.5% and 8.5%, respectively. Profitability gloom However, there was not much cheer on the profitability front. Coforge and Persistent Systems reported operating margins of 13.2% and 15.5%, respectively. While Coforge's margins were flat sequentially, Persistent's margins fell 10 basis points. One basis point is a hundredth of a percentage point. 'At what cost is Coforge's revenue growing, because its profitability has taken a hit on a yearly basis, and is down about 200 basis points now," said a Mumbai-based analyst on condition of anonymity. A looming concern for the company is its free cash flow, or the cash left after operating expenses and capital expenditure. Coforge spent more money than it earned through its operations as negative free cash flow for the quarter totalled $21.5 million. Investors took notice. Coforge and Persistent's shares fell 9.4% and 7.7% at the end of trading hours on Thursday to ₹1,674.95 and ₹5,171.25, respectively. The BSE Sensex fell 0.66% to 82,184.17 points. Headcount Both companies added people last quarter. While Coforge added 1,164 people to end with 34,187 people, Persistent added 746 people in the quarter to end with 25,340 employees. This is in contrast to three of the big five including HCLTech, Wipro and Tech Mahindra, which cut headcount by 597 last quarter. The mid-caps' strong performance comes as larger peers have struggled to post strong growth in the previous quarter amid delayed decision-making and uncertain demand environment. TCS, Infosys, Wipro, and Tech Mahindra called out a murky spending environment and blamed macroeconomic uncertainties for delayed decision-making and project implementation by Fortune customers. On the other hand, HCLTech's management said the macroeconomic environment is stable, with some sectoral variations. Persistent Systems was set up in 1990 by Anand Deshpande, a former Hewlett-Packard employee. He currently owns 29.35% of the company, making him the single-largest shareholder of the company. The company has a market capitalization of ₹80,931.53 crore. Coforge, formerly NIIT Technologies, started as an independent firm in 2004. It was acquired by Baring Private Equity in 2019. It is owned entirely by the public and has a market capitalization of ₹56,031.15 crore.
Business Recorder
5 days ago
- Business
- Business Recorder
Indian shares fall as earnings weigh on IT, consumer names
Indian shares fell on Thursday, weighed down by post-earnings losses in information technology and consumer stocks, and as financial services firms declined after a three-day rally. Investors remained on watch for trade talks with the United States amid an imminent free-trade agreement with the UK. The Nifty 50 settled 0.63% lower at 25,062.1 points while the BSE Sensex lost 0.66% to 82,184.17. Eleven of the 16 major sectors fell, with IT and consumer shares leading the losses with 2.2% and 1.1% declines, respectively. Indian benchmarks shares track global rally India's broader smallcaps and midcaps lost 1.1% and 0.6%. 'Domestic factors drove the market on the day,' Aamar Deo Singh, senior vice president at Angel One, said. 'We are seeing some profit booking and investors are also looking at corporate earnings. Earnings remain key for Indian market to arrest their underperformance to global equities.' India's benchmark indexes have fallen about 1.8% this month against a 4% jump in MSCI's broadest index for Asia-Pacific stocks outside Japan. On the day, among IT names, Coforge and Persistent Systems fell 9.4% and 7.7%, while Infosys shed 1.4% after their results, as investors worried about demand for India's $283 billion IT sector. Consumer giant Nestle India dropped 5.3%, dragging its peers lower as its profit declined on raw material costs and expenses tied to its manufacturing expansion. Heavyweight financials fell 0.6% as traders took profits following a 2.5% jump over the last three sessions. Indian Energy Exchange slumped nearly 30% on concerns of market share loss from a planned overhaul of electricity pricing rules. Tata-owned retailer Trent lost 3.8% after Goldman Sachs downgraded the stock to 'neutral' from 'buy'. Dr Reddy's gained 1.5%, boosted by the drug maker's plan to launch a generic obesity drug in 87 countries next year.
