Coforge Share Price: Stocks Tumbles Despite Company Bagging $507 Million, Strong Q1 Results

Coforge Share Prices Today: Coforge, an IT company formerly known as NIIT, witnessed a massive decline in its share prices in Thursday's trading. At 12:30 PM on July 24, Coforge shares are trading at Rs 1,705 a piece, a decline of 8.01 per cent from previous close at Rs 1,849.70. Coforge shares opened at Rs 1,829 today morning.

Despite this dip, a report from Morgan Stanley maintains an "Overweight" rating on Coforge shares due to the company bagging USD 507 million in fresh deals this quarter. This figure represents a sharp drop from the USD 2.1 billion recorded in the previous quarter, which notably included a large Sabre deal.

Meanwhile, Coforge Q1 results outperformed expectations and stood out amid a tepid showing by industry peers. The midcap IT firm posted an 8 per cent growth in revenue in constant currency terms for the June quarter. This performance contrasts with other companies, such as Persistent Systems and LTIMindtree, which reported constant currency growth of 3.3 per cent and 0.8 per cent, respectively.

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Coforge also signed a USD 1.56 billion contract with Sabre, which has powered a 31 per cent sequential surge in its travel, transport and hospitality vertical. This has helped counterbalance its BFSI (Banking, Financial Services, and Insurance) segment, where banking revenue slipped close to 1.1 per cent, and insurance saw a small increase of 1 per cent in US dollar terms.

The company's numbers signify a healthy financial performance, as rupee revenue rose 8.6 per cent sequentially to Rs 3,687 crore. On the margin front, its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 60 basis points to 17.5 per cent, while its EBIT (Earnings Before Interest and Taxes) margin held steady at 13.2 per cent.

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After reviewing Coforge's first-quarter results, Morgan Stanley labeled its stock as "Overweight" in a recent report. They set a target price of Rs 1,880 per share. The growth for Coforge primarily came from its travel and business sectors. However, according to Morgan Stanley, the company's BFSI and insurance sectors also performed well this quarter.