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Coforge Limited: Driving Digital Transformation

One of the most prominent Banking, Insurance and Tourism sector software services providers in India as well as globally.

(A) About the company

Coforge Limited is an IT services company providing end-to-end software solutions and services.
Also, It is among the top 20 Indian software exporters and its prominent global customers include British Airways, the ING group, SEI Investments, Sabre, and SITA.

Coforge has a proven track record in delivery execution and a strong culture of employee, partner, and also client centricity. Also, The company has a global presence with 26 delivery centres spread across 21 countries.

Coforge Limited has the vision to "Engage with the Emerging" while its mission is to "Transform at the Intersect". Subsequently, The company provides proven capabilities in product engineering, digital solutions, data analytics, AI/ML, experience, cloud, business process re-engineering, digital process automation, and Low Code/No Code platforms.

(B) Journey of Coforge Limited

(C) Executive Management

(D) Shareholding Pattern

(E) Revenue Segments of Coforge Limited

(i) Application Development and Maintenance

This segment includes services such as developing and maintaining web and mobile applications, enterprise applications, and customer relationship management (CRM) systems. Subsequently, Coforge has expertise in a wide range of application development and maintenance technologies.

(ii) Intelligent Automation

This segment includes services which focuses on integrating automated processes as well as machine learning.

(iii) Data and Integration

This segment includes services such as data warehousing, data mining, and data integration. Also, Coforge Limited helps its customers to collect, store, manage, and analyze their data to gain valuable insights.

(iv) Cloud and Infrastructure Management

This segment includes services such as cloud migration, cloud-managed services, and infrastructure management services. Consequently, Coforge helps its customers to migrate their workloads to the cloud, manage their cloud infrastructure, and optimize their cloud costs.

(v) Product Engineering

This segment includes services such as product design, product development, and product testing. Also, Coforge helps its customers to design, develop, and test new products and bring them to market.

(vi) Business Process Management (BPM)

This segment includes services such as business process outsourcing, customer relationship management (CRM) services, and human capital management (HCM) services. Also, Coforge helps its customers to outsource their business processes, improve their customer relationships, and manage their human capital more effectively.

(F) Cost Structure

Coforge Limted_Cost_PAWealth

(G) Financial Parameters

Coforge Limted_financials_PAWealth

The company's net sales have increased from Rs. 2304.99 Cr. in FY14 to Rs. 8014.6 Cr. in FY23 at a CAGR of 14.85%. While The company's Profit After Tax(PAT) has increased from Rs 238.15 Cr. in FY14 to Rs 745.1 Cr. in FY23 at a CAGR of 13.51%. Also, The company's return on equity (ROE) has increased from 18% in FY14 to 24.2% in FY23. While, The company's Debt-equity ratio has increased to 0.2x in FY23.

DuPont Analysis

Coforge Limted_Dupont_PAWealth

(H) Management Discussion Highlights


  • Despite the COVID pandemic, Coforge Limited achieved the US$ 1 bn revenue milestone a year before what was originally planned. Subsequently, Coforge is now targeting a revenue milestone of US$ 2 billion.
  • The company is setting up a low code/no code service line to focus on developing industry-specific use cases, and also leveraging low code/no code platforms, such as Pega, Appian, Mendix and OutSystems to accelerate time-to-market for our customers.
  • Coforge entered new partnerships with Databricks, a cloud data and AI company, as well as, with Newgen, a global provider of a low-code digital transformation platform.
  • During FY2023, Coforge signed 11 large deals ($20mn+ TCV). Subsequently, This included two $50+ million and five $30+ million contracts.
  • Coforge announced a Center of Excellence (CoE) dedicated to exploring applications of Web3 Technologies and also the Metaverse.
  • Coforge's consolidated revenue for FY2023 grew 24.6% to Rs. 8014.6 Cr.
  • The BFS(Banking and Financial Services) vertical registered stellar growth of 47.0%, the TTH(Travel, Tourism and Hospitality) vertical grew by 21.5%, Insurance vertical growth declined by 3.7% and while other businesses, including primarily Healthcare, Hi-tech, Retail, and Overseas Public Sector, collectively grew 23.1% year-on-year.

Concall Highlights

  • In Q2 FY24, revenue contributions from different verticals were: BFS (Banking and Financial Services) 31.6%, Insurance 22.6%, TTH (Travel, Transportation and Hospitality) 18.5% and others (which included Healthcare, Retail, Hi-Tech, Manufacturing and Public Sector) at 27.3%.
  • Employee Utilization stood at 80% for Q2FY24 vs. 81% for Q1FY24.
  • There has been a demand uptick in the global markets for its verticals as well as services industry.
  • Analytics, Automation and Cloud Service lines would be the growth drivers for the next 3 to 5 years.
  • Repeat client business at 93% is best in class for a firm of Coforge's size.
  • Reiterated annual revenue growth guidance of 13% to 16% in constant currency terms for FY'24 and also aims for Adjusted EBITDA margins to remain at similar levels to the FY23.
  • The 12-month employee attrition rate till Q2FY24 stood at 13%, One of the best in the IT industry.

(I) SWOT Analysis


  • Diversified revenue mix across verticals and practices: Revenue comes from a mix of IT services to the BFS, insurance, travel, transport and hospitality, and others. Among the practices, it has a diversified portfolio spread across application development and maintenance, cloud and infrastructure management, business process management, product engineering, data and integration, and intelligent automation.
  • Healthy financial risk profile: While the company has been aggressively acquiring entities, their modest sizes and healthy cash positions have not necessitated substantial contracting of debt.


  • Average scale of operations: The company is a tier-II player in the Indian software industry, as reflected in modest revenue of Rs 8,015 crore in FY2023. This restricts ability to bid for large orders.
  • Exposure to intense competition: The IT industry in India is challenging because of intense competition among local players and the entry of multinational corporations that are continuously expanding their offshore operations in India.


  • Productivity and efficiency gains from integrating artificial intelligence into analytics and also automation may lead to increased demand from existing customers.
  • Emerging technologies like web3 and Metaverse may result in additional revenue verticals for the company.


  • Stressed business services demand may lead to a decline in overall revenue projections for the company.
  • Significant dependence on foreign markets exposes a firm to geopolitical risks.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets and Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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