Coforge Q2 Net Profit Jumps 56.5% to ₹588 Crore on Encora Acquisition; Revenue Rises 53.6%

Coforge Reports Strong Q2 Results for FY2026-27

Indian IT services company Coforge reported a sharp increase in profit and revenue for the September quarter of FY2026-27, supported by its acquisition of Encora and continued momentum in large client deals.

The company's consolidated net profit rose 56.5% year-on-year to ₹588.1 crore, compared with ₹375.8 crore in the corresponding quarter of the previous financial year. On a sequential basis, net profit increased 13.4%.

Revenue from operations grew 53.6% year-on-year to ₹6,170.8 crore from ₹4,016 crore a year earlier. The results reflect the contribution from Encora, which became part of Coforge following the acquisition, along with demand for technology services and new business wins.

Revenue Rises 53.6% to ₹6,170.8 Crore

Coforge's September-quarter revenue increased significantly compared with the year-ago period.

Financial metricQ2 FY2026-27Year-on-year changeConsolidated net profit₹588.1 crore+56.5%Revenue from operations₹6,170.8 crore+53.6%EBITDA₹1,269.7 crore+67.3%EBIT₹984.7 crore+67.8%EBIT margin16.0%Up 134 basis points

The figures show growth in both revenue and operating profitability. Coforge's reported EBITDA margin reached 20.6%, an increase of 168 basis points year-on-year, while the EBIT margin improved to 16%.

Encora Acquisition Drives Growth

The acquisition of engineering services company Encora was a major factor behind Coforge's growth during the quarter.

Coforge acquired Encora in a transaction valued at approximately $2.35 billion. The latest results include a full quarter of contribution from the acquired business, increasing the scale of Coforge's operations and strengthening its engineering capabilities.

The acquisition also expands Coforge's presence in areas such as digital engineering, data, cloud and artificial intelligence-led services.

However, the reported growth reflects both acquisition-led expansion and underlying business performance. Investors evaluating the company's progress should therefore distinguish between growth contributed by acquisitions and organic growth from existing operations.

Coforge Signs Eight Large Deals in a Single Quarter

Coforge reported strong deal activity during the September quarter, signing eight large deals, its highest number in a single quarter, according to the company.

The new deals generated total contract value of approximately $1.04 billion during the quarter. The agreements were signed across North America, Europe and Australia.

The company's next 12-month executable order book reached $2.38 billion, representing a 45% year-on-year increase.

A growing order book can provide visibility into future business activity, although the timing of revenue recognition and actual execution depends on contract schedules, client requirements and broader market conditions.

AI-Led Services Support Business Momentum

Coforge's management highlighted increasing demand for artificial intelligence-led transformation and engineering services.

Chief Executive Officer Sudhir Singh said during the company's earnings discussion that demand for enterprise transformation using AI was strengthening, even as procurement-driven requests for proposals had slowed.

The company also indicated that AI adoption was helping improve productivity and operating performance in some existing fixed-price projects.

As businesses seek to modernise applications, improve data capabilities and deploy AI tools, IT service providers are competing to secure contracts that combine technology implementation with measurable business outcomes.

At the same time, slower procurement activity in some areas remains a challenge for the broader IT services industry.

Coforge Raises FY2027 EBIT Margin Guidance

Following the quarterly performance, Coforge raised its EBIT margin guidance for FY2026-27 to 16%, from its earlier guidance range of 15.5% to 16%.

The company also indicated that it is targeting an EBIT margin of 17% in the following financial year, subject to business performance and execution.

The improved outlook reflects the company's focus on operational efficiency, deal execution and productivity improvements.

Margin expansion is an important measure for IT services companies because it indicates how effectively they convert revenue into operating profit. However, the ability to sustain higher margins depends on employee costs, pricing, utilisation, project mix, acquisition integration and changes in client spending.

Employee Headcount Increases

Coforge reported an increase of 1,137 employees during the quarter, taking its total headcount to 47,365.

The rise in employee numbers comes as the company expands its operations following the Encora acquisition and works to execute its growing project pipeline.

The workforce figure provides context for the company's delivery capacity, although employee growth alone does not determine future profitability. Utilisation rates, productivity, employee costs and the mix of services delivered also influence operating performance.

What Coforge's Results Mean for the IT Sector

Coforge's quarterly results highlight the importance of acquisitions, AI-led services and large contract wins in shaping growth for Indian IT services companies.

The Encora acquisition has increased Coforge's scale, while the company's deal pipeline suggests that it continues to secure business across multiple international markets.

Nevertheless, the industry faces challenges from slower procurement activity, changing technology budgets and uncertainty over how AI will affect traditional outsourcing models.

For Coforge, sustaining growth will depend on integrating Encora effectively, converting its order book into revenue, delivering projects profitably and maintaining demand for its technology services.

Key Takeaways

• Net profit rose 56.5% year-on-year to ₹588.1 crore in Q2 FY2026-27.

• Revenue increased 53.6% to ₹6,170.8 crore.

• The full-quarter contribution from the $2.35 billion Encora acquisition supported growth.

• Coforge signed eight large deals during the quarter.

• New orders had a total contract value of approximately $1.04 billion.

• The next 12-month executable order book reached $2.38 billion, up 45% year-on-year.

• The company raised its FY2027 EBIT margin guidance to 16%.

• Coforge is targeting an EBIT margin of 17% in the following financial year.

• Total employee headcount increased to 47,365.

• AI-led transformation, engineering, data and cloud services remain important areas of business demand.

Bottom Line

Coforge delivered strong second-quarter results, with net profit increasing 56.5% to ₹588.1 crore and revenue rising 53.6% to ₹6,170.8 crore. The Encora acquisition contributed to the expansion, while eight large deals and a growing order book strengthened the company's business pipeline.

The increase in EBIT margin guidance to 16% also signals management's confidence in operating performance. Going forward, the company's ability to integrate Encora, convert its order book into revenue and sustain profitability will be important factors in determining whether the strong quarterly momentum continues.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Financial results and management guidance do not guarantee future performance. Investors should review company disclosures and consider their own financial circumstances before making investment decisions.