Coforge reports 15% revenue growth for Q1 FY2014

Robust order intake of  $145mn

New Delhi, July 16th 2013, Tuesday: – Coforge Limited (NSE: Coforge), a leading global IT solutions organization, today announced its financial results for the quarter ended in June 30, 2013 with a revenue increase of 15.4% over the same period last year to Rs. 541.9 Crores. Operating Profits stood at Rs. 78.2 Crores, representing a YoY growth of 4.1%.


APRIL-JUNE FY'14 QUARTER Performance at a Glance

Qtr ended
June 30, 2012

Rs. Cr

Qtr ended
June 30, 2013

Rs. Cr

Consolidated Revenue  Rs. 469.6 Rs. 541.9 15.4%
Operating Profit  Rs. 75.1 Rs. 78.2 4.1%
Profit After Tax  Rs. 57.5 Rs. 53.2 -7.5 %

Rs. 5.4 Crores of dividend tax was paid for repatriation of dividend from overseas subsidiaries during the quarter which contributed to the net profit decline. This one-time opportunity was available during the quarter to offset taxes paid from dividend distribution tax payable for FY2013.

“Revenues grew 0.9% sequentially during the quarter,” said Mr. Arvind Thakur, CEO, Coforge Ltd. He further added, “Robust intake of USD 145mn during the quarter will sustain further growth during the year.”

Fresh orders of USD 145Mn were secured during the quarter leading to USD 263Mn worth of orders executable over the next 12 months. This includes a $15Mn contract renewal with a Travel and Transportation client in USA and a prestigious win of $60Mn to implement State-of-the-Art Airport Operations Control Centers (AOCC) across 10 airports in India with Airports Authority of India.

Five new clients were added during the quarter, two in India, one each in USA, EMEA and APAC, all in the Travel and Transportation segment.

Operating margins declined 202bps sequentially to 14.4% primarily on account of wage hikes implemented from April 01 2013.

“We see good signs of recovery in the U.S. and strong traction in the domestic market, while Europe continues to exhibit weakness” said Mr. Rajendra S. Pawar, Chairman, Coforge Ltd.  

The contribution to the total revenues from the U.S. increased to 39% while that from EMEA stood at 35%. The revenue share from rest of the world improved to 26%. Among industry segments, Travel and Transportation contributed to 36%, BFSI was 30% and Manufacturing/Distribution contributed to 7% to the revenue mix.

During the quarter the Company launched a major culture change initiative to provide exceptional value to its customers and build sustainable competitive advantage. The initiative involves several interconnected building blocks covering all aspects of the organization leading to uplifting service levels. Over 2000 employees have already been educated to realize the Company’s service vision – “New Ideas, More Value”, and the rest of the organization would be covered during the year.

Total headcount increased to 8,207 at the end of the quarter under review, with steady attrition maintained at 12.36%.

Acknowledgements during the quarter

  • Coforge was featured in the 2013 list of Computerworld’s ‘100 Best Places to Work in IT’.
  • The Company’s joint venture with Morris Communications included as a case study under the Innovation and Change Management segment by University of Cambridge.
  • Coforge’ two business cases - UTICA and ASSURANT mentioned in the compendium of case studies by Novarica, a U.S based research and advisory firm specializing in insurance and banking.

About Coforge

Coforge is a leading IT solutions organization, servicing customers in North America, Europe, Middle East, Asia and Australia. It offers services in Application Development and Maintenance, Managed Services, IP Asset or Platform Solutions, and Business Process Outsourcing to organisations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, Healthcare and Government sectors. The Company adheres to major global benchmarks and standards, having secured the ISO 9001:2000 certifications and the ISO: 27001 Information Security Management accreditation. Coforge also follows global standards of development. It has been assessed at Level 5 of SEI CMMi version 1.2. Coforge Business Process Outsourcing conforms to the highest quality standards such as COPC and Six Sigma. Its data centre operations are assessed at the international ISO 20000 IT management standards.

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Safe Harbor

Certain statements in this release are forward-looking statements. The business involves various risks, and uncertainties that could result in the actual results to differ materially from those indicated here. All forward looking statements made herein are based on information presently available to the management of the Company and the Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.