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Coforge raises FY23 revenue growth guidance to 22% after highest ever order intake in Q3

Coforge raises FY23 revenue growth guidance to 22% after highest ever order intake in Q3

Coforge raises FY23 revenue growth guidance to 22% after highest ever order intake in Q3
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By Prashant Nair   | Sonia Shenoy   | Nigel D'Souza  Jan 23, 2023 6:56:29 AM IST (Published)

Coforge Q3 results: Sudhir Singh, ED & CEO, Coforge told CNBC-TV18 that it was a solid quarter three in which the firm not just recorded the highest ever order intake but also signed five large deals in a somewhat uncertain macro environment.

Information technology company Coforge on Friday raised its revenue guidance for the financial year 2022-2023 to 22 percent from 20 percent earlier after the firm saw the highest ever order intake.

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The firm registered a 5 percent sequential growth in revenue in the October to December 2022 at Rs 2,055.8 crore, though it missed the CNBC-TV18 poll estimate. The tech company’s came in slightly higher than analysts’ projection, rising 13.5 percent on a quarter on quarter basis to Rs 228.2 crore.
Sudhir Singh, ED and CEO, Coforge told CNBC-TV18 that it was a solid quarter three in which the firm not just recorded the highest ever order intake but also signed five large deals in a somewhat uncertain macro environment. One of the deals is a $50 million plus deal while another one is a $30 million plus total contract value (TCV) deal, he said.
He added that the firm’s gross margin went up 133 basis points (bps), which continues to allow it to invest in sales and marketing and back-end capability build. The five large deals, highest ever order intake in a quarter, and the 12-month order book at a record high give the company the confidence that it should be able to withstand most scenarios - specific to an uncertain macro, he said.
Coforge’s Singh explained, “We believe that guidance also is conservative, because that guidance at 22 percent means that we only need to grow 3.5 percent next quarter. We have already done 3.7 in quarter three, which is a shorter quarter. So we do think we will meet 22 percent and hopefully exceed 22 percent.”
The CEO noted that the firm touched a billion dollars in the current quarter and the intent is to get to $2 billion with great speed. In the last five years, the last 20 quarters, the firm has overcome most scenarios including COVID when the travel industry went down, and had exposure to it, figured out a way to drive very strong growth.
“We've been growing almost 20 percent over the last five odd years compounded annual growth rate (CAGR), we'd like to continue to move with speed, hopefully greater speed as we get to $2 billion,” he said.
Looking at the last five years, the firm has also talked about an ability to command a price premium, drive margins up and use those margins to keep investing in sales marketing capability. “At a time like this, when macros are uncertain is when a firm like us believes and a team like us believes you need to lean in, drive growth, differentiate. The team that we've built up, the capabilities that we've created, is what's led us to sign five deals in the shortest quarter of the year, in the midst of uncertain macro. So it's been a cumulative effect, effort. It's taken time to build and it gradually seems to be giving us building the dividends that we always wanted to see,” Singh noted.
Talking about ADR listing, he said the firm is in no tearing hurry to do it until the market stabilises.
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