(Reuters) -India’s Coforge posted fourth-quarter profit below estimates, as the IT services company was hurt by increased expenses.
Its consolidated net profit rose 16.8% to 2.61 billion rupees ($31 million) for the quarter ended March 31, below analysts’ expectation of 2.81 billion rupees, according to data compiled by LSEG.
A spike in Coforge’s acquisition and merger related costs pushed up its total expenses by 49%.
Its revenue from operations rose to 34.1 billion rupees from 23.18 billion rupees last year, but came in below analysts’ expectation of 35.20 billion rupees.
Coforge’s order intake for the quarter rose to $2.1 billion, from $774 million last year.
KEY CONTEXT
Coforge has been trying to boost its revenue through various acquisitions and had recently completed the purchase of India-based Cigniti Technologies and U.S.-based Rythmos and Xceltrait.
In contrast, rival Mphasis which beat profit expectations last week on strong deal wins.
However, larger peers, Tata Consultancy Services and Infosys have flagged a difficult year ahead as the global economic uncertainty propagates cautious client spending.
The $283 billion-sector is facing challenges due to U.S. President Donald Trump’s unpredictable tariff policies, which are causing uncertainty and delays in technology spending decisions among its major clients.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean # of Stock to Div
growth(%) growth(%) rating* analysts price yield(%)
target**
Coforge 35.14 18.83 27.41 65.43 BUY 30 0.88 1.04
Persistent Systems 47.42 31.31 19.29 24.66 HOLD 33 0.97 0.56
Mphasis 24.33 15.19 9.12 10.63 BUY 32 0.90 2.31
Tech Mahindra 24.07 15.78 4.42 26.06 HOLD 41 0.95 2.99
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JAN-MAR STOCK PERFORMANCE
— All data from LSEG
($1 = 84.3120 Indian rupees)
(Reporting by Aleef Jahan; Editing by Savio D’Souza)
