Coforge Q2 FY27 Earnings Call: Order Intake Crosses $1 Billion, Margin Guidance Raised to 16%

Coforge Ltd held its Q2 FY27 earnings call on October 23, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter on Revenue, Margin and Cash Flow

• Consolidated revenue of $652.2M (Rs.61,708M) — sequential growth of 10.9% CC / 10.1% USD / 11.6% INR; organic sequential growth was 3.8% CC.
• Consolidated EBIT margin of 16% — ahead of the 15.5% FY27 guidance set at the start of the year; organic business EBIT margin was 17%.
• EPS of 13.3 in Q2 FY27 vs 12.3 in Q1 FY27, with the company on track for EPS accretion in FY27.
• Q2 FY27 free cash flow of $53.8M — 89% FCF/PAT conversion in the quarter, 92% for H1 FY27; FY27 guidance of 100% FCF/PAT reaffirmed.
• Combined G&A improved to 6.3% in Q2 FY27 from 6.6% in Q1 FY27, reflecting the full-quarter benefit of the 40% Encora G&A reduction taken in Q1 FY27.
• Revenue mix: AI-led engineering, data integration and cloud contributed 86% of Q2 FY27 consolidated revenue; top 5 clients were 18.1% and top 10 26.4% of Q2 revenue.
• Key account momentum — top 10 and top 20 accounts each grew 20%+ YoY; a second client crossed a $100M annualized run rate starting Q2 FY27.

Second-Ever $1B+ Intake Quarter; Record Large Deal Count

• Q2 FY27 order intake exceeded $1B — the second time in company history, up 51% QoQ and 102% YoY; broad-based across geographies: $455M North America, $485M Europe, $101M rest of world.
• 8 large deal wins in Q2 FY27 — the highest ever in a quarter; management hopes to sign 8 or more again in Q3 FY27, the shortest quarter of the year.
• Large deal mix — 2 BFSI, 3 public sector, 2 high-tech, 1 retail; geographically 3 North America, 4 Europe, 1 rest of world, including a $230M UK public sector engagement signed in July 2026; most large deals are sole-sourced and driven by proactive solutions.
• Next-12-month executable order book at an all-time high of $2.4B — up 45% YoY from $1.64B, strengthening growth visibility for the rest of FY27.
• Deal strategy remains proactive and solutions-led to avoid competing on price, insulating margins while driving growth; John Speight noted Coforge is increasingly winning deals through advisory channels it traditionally never had.
• Management attributed the industry demand slowdown largely to slower procurement-driven RFPs, while demand for AI-led transformation is intensifying; intent is to accelerate — not merely sustain — growth from the ~$2.6B revenue run-rate.
• Recent order wins will ramp near-immediately in most cases — investors need not wait for FY 2027-2028 or end of Q4 FY 2026-2027 to see the ramp, per the CEO.

520+ AI Engagements; "Critical Tipping Point" on Adoption

• 520+ AI engagements across 225+ clients in Q2 FY27, with 260+ agents deployed in live operations; CEO Sudhir Singh said Coforge has reached a "critical tipping point" on AI adoption.
• Four-front enterprise AI strategy — Coforge Neuron (enterprise autonomy enablement suite), agentic AI assets ForgeX, CodeInside.ai and EvolvOps.ai, Momentum Blue forward-deployed engineering unit supported by Mod Squads, and AI Launchpad (open-weight AI ecosystem for selecting, adapting, governing and deploying open-weight models).
• Adoption is broad-based across verticals — BFS, public sector, travel and insurance (from the European perspective), with insurance adoption driven by clients' significant legacy challenges; travel is a significant driver in large programs currently underway.
• Client outcomes in Q2 FY27 — a global HR solutions provider's AI quote agent cut turnaround from ~3 weeks to under 5 days; a North American P&C insurer's mod squads modernized legacy APIs as microservices on AWS with delivery now 30% faster; a global pharma company released ~15,000 business hours from AI across R&D portfolio and program management.
• Largest legacy modernization program — migration of 12 million lines of code to Google Cloud over a 4.5-year duration, completely underlaid with Copilot and Coforge's Forgex engineering asset platform.
• Partnerships expanded — Coforge joined the AWS Forward Deployed Engineer pilot in September, with AWS investing to grow that footprint; the Pega partnership was expanded so Coforge builds and delivers Pega-powered offerings under its own brand, taken to market jointly with Pega.
• Analyst recognitions — White Lane Research named Coforge an exceptional performer in application services and cloud & infrastructure services in its 2026 UK and Ireland IT sourcing study; HFS Research identified Coforge as a standout non-linear growth leader; Nelson Hall positioned Coforge as a leader across six segments in its 2026 needs assessment for AI-enabled cloud infrastructure management services.

Guidance Raised to 16%; Clean-Up Items Fade by Q4 FY27

• Consolidated EBIT margin guidance for FY27 raised to 16% from 15.5% — management plans a reported Q4 FY27 EBIT margin of 17%, which it says establishes a glide path to further margin expansion in FY28.
• Long-term margin ambition — management stated its intent to be within the top three highest EBIT margin tech services firms in the industry in the short-to-medium term, arguing AI is breaking the link between scale and margin leadership.
• Current margin uptick comes from AI infusion into existing fixed-price projects, not anticipated new deals at better pricing; benefits of new AI-led deals will start reflecting in Q4 FY27, as strategy planning is done and execution is underway.
• Hedge losses of $10.2M in Q2 FY27 (MTM basis) expected to fall to $7.1M in Q3 FY27 and $1.2M in Q4 FY27, then zero; a US dollar-denominated loan now provides a natural hedge on the balance sheet.
• Exceptional expenses of $5.9M in Q2 FY27 (integration costs — legal entity rationalization and tax structuring) guided to zero in Q3 FY27; total acquisition/integration spend reached ~$17M vs $15-16M guided at acquisition, driven by overseas tax planning and rationalization of 95 entities.
• EPS guided to touch around Rs.19-20 in Q4 FY27 — driven by hedge losses and exceptional expenses going away (flowing straight to the bottom line) plus EBIT expansion.
• G&A leverage without headcount cuts — S&M was not cut and no G&A headcount (finance, HR, IT) was let go; revenue grew 50% YoY in Q2 FY27 while G&A grew only 15% (CFO cited 53% revenue vs 15.6% G&A YoY), as technology infusion absorbed 40-50% growth without additional hiring.
• OCF-to-EBITDA conversion dip attributed to legal entity rationalization — contracts being novated from the US (Encora) to India (Coforge parent), delaying invoicing and collections; a correction is expected going forward.

Ahead of Plan on Margins; Growth Parity from Q3 FY27

• Encora revenue was sequentially flat in Q2 FY27 — CFO reconciled reported $652M (10.1% growth) and 10.9% CC (~$657-658M); applying the 3.8% organic CC growth implies Encora revenue of $147-148M in Q2 vs $100M for two months in Q1 (~$148M full-quarter equivalent).
• Margin expansion ahead of the acquisition plan — Encora margins are now significantly ahead of the plan communicated at consummation of the deal; management said the acquisition is ahead of plans on every aspect.
• From Q3 FY27 onwards, Encora's revenue growth is expected to mirror Coforge's — supported by the large deal pipeline across its healthcare client and high-tech client; integration is complete and the firm operates as one single unit.
• Revenue synergies cited — the largest deal in Coforge's current pipeline is with an Encora client (win hoped for in Q3 or Q4 FY27), and Coforge's largest healthcare client — a top-10 account described as one of the most storied names in healthcare — came from the Encora stable.
• Nearshore capability built — John Speight noted the acquisition has built a very strong nearshore capability across Eastern Europe and Latin America, complementary to Coforge's delivery execution capabilities.
• Reporting alignment — deal intake and the next 12-month order book include Encora from Q2 FY27; the executable order book had already included Encora from Q1 FY27, with only intake previously excluded.

Growth Leadership Bid for Third Year; FY28 Margin Floor

• Management expects Coforge to be the industry growth leader for the third consecutive year in FY27 — citing broad-based order intake, broad-based large deals, robust key account growth, and a de-risked top-10 client profile.
• FY28 margin floor of 17% — Sudhir Singh confirmed that if Coforge exits Q4 FY27 at 17% EBIT margin, the least it should deliver in FY 2027-2028 is 17%.
• Confidence extended to FY28 growth — Sudhir Singh affirmed equal confidence for FY28 in response to HSBC's Pratik Maheshwari, clarifying the reference was to the pipeline, not the executable order book.
• AI-led efficiency pass-through is deal-specific — asked by Dipesh Mehta (Emkay Global) whether efficiencies are passed to clients in large contracts, Sudhir Singh said in some deals they must be passed while in others they are not; net, the margin outlook is "net positive."
• Shift from cost play to value play — John Speight said a proactive proposal approach with an AI focus on efficiency, value and outcome represents a significant move away from a cost play, which management sees as core to success going forward.
• Headwinds flagged — management cited acute industry-wide pricing pressure, AI-led deflationary winds and tough macros, noting clients increasingly favor differentiated partners delivering solutions embedded in specific enterprise operating contexts over standalone assets and platforms.
• Other guidance items — FY27 EBITDA margin guidance of 20.5-21% (H1 FY27 at 20.5%); steady-state tax rate of 23-24% per the FY27 outlook; minority interest to stay at current levels, linked to the Coforge BPS business, a JV in which the client owns a 20% share.