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Motilal Oswal Report
Coforge Ltd. reported an in line revenue growth of 4.7%/2.7% QoQ in constant currency/U.S. dollar terms in Q1 FY23. Growth was led by banking, financial services (up 9.4% QoQ), while insurance fell by 7.7%.
It reported an order intake of $315 million, implying a book-to-bill ratio of 1.3 times, including an over $50 million deal. Ebitda margin of 16.5% (down 390 bps QoQ) missed our estimate of 17.8%.
The management reiterated its FY23 Ebitda margin guidance of 18.5-19% as it guided at a 150-200 bps margin pickup in Q2 FY23.
We see good revenue performance and continued momentum in deal wins as a positive and expect Coforge to deliver revenue growth ahead of its FY23 guidance of at least 20% YoY (a slight increase from its earlier guidance of up to 20% YoY growth), despite macroeconomic headwinds in H2 FY23.
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