Coforge Q2: Encora Lifts Revenue 54%, EPS 18%

Coforge's revenue was ₹61,708 million in the September quarter, up 53.6% from a year earlier, or 40.1% in dollars to US$652.2 million. Most of that jump is the acquired Encora business: organic constant-currency growth was 3.8% in the quarter. The company raised its FY27 EBIT margin guidance to 16% from 15.5% and signed eight large deals. Paying for Encora shows up elsewhere: goodwill has roughly quadrupled and borrowings are about nine times last year's (our arithmetic), and earnings per share rose 18.3% while profit rose 56.5%.

The quarter in numbers

In rupees, quarterly revenue is about ₹6,171 crore (our arithmetic). Free cash flow was 89% of profit ([FS]).

What Encora changed on the balance sheet

The fact sheet notes that the quarter "Included integration related expenses for Encora" ([FS]). Amortisation of acquired intangibles rose to ₹1,453 million from ₹468 million a year ago ([FS]); the board outcome refers to "the date of acquisition of Encora by Coforge" ([BM]).

Moat and margin

Focus moat: winning large deals. Eight large deals in one quarter, "the most the firm has ever signed in a single quarter" in chief executive Sudhir Singh's words, and a 95.5% repeat-business ratio point to sticky client relationships ([PR], [FS]). The top 10 clients, 26.4% of revenue, grew 20.0% ([FS]).

Margin: guided up. The EBIT margin was 16.0%, up 134 basis points from a year ago, and Singh says "We expect to further improve our EBIT margin to 17% next year" ([PR]). That is after a sharp rise in amortisation of acquired intangibles, which sits above the EBIT line in Coforge's table ([FS]).

Per share, less. Profit rose 56.5% but EPS 18.3% ([PR], [FS]): more shares are sharing the profit, and interest on new debt is a new cost. For a shareholder, the per-share number is the one that counts.

A US listing step. Both the press release and the fact sheet say "A Registration Statement on Form F-1 relating to certain securities of Coforge has been filed with the U.S. Securities and Exchange Commission but has not yet become effective" ([PR]). The filings do not say what is being registered.

MoatSCORE (Moat Screener, first pass): Coforge 5.10, AMBER+. For comparison, Persistent Systems 5.11 and Mphasis 5.10 ([MS]).

The bear case

• Organic growth is modest: 3.8% in the quarter, against reported growth of 10.1% ([FS]).
• Leverage has jumped: borrowings of ₹56,457 million against ₹6,082 million a year ago ([FS]).
• Per-share growth trails profit growth by a wide margin.
• Goodwill of ₹165,354 million carries impairment risk if Encora disappoints.

The case for

• Deal flow: US$1.04 billion of intake and a US$2.38 billion executable book, up 45% ([PR]).
• Margin guidance raised for this year and a stated target for next ([PR]).
• Cash conversion at 89% of profit ([FS]).

What to watch

1. Organic growth, quarter by quarter, as Encora is absorbed.
2. Debt reduction and interest cost.
3. What the US Form F-1 registration turns into.

Sources

• [PR] Coforge, Q2 FY27 press release (NSE)
• [FS] Coforge, Q2 FY27 fact sheet and presentation (NSE)
• [BM] Coforge, board meeting outcome (NSE)
• [MS] Moat & Margin, Moat Screener and How MoatSCORE works

Educational research, not investment advice. Every figure above is drawn from Coforge's own filings, read from the primary documents on 24 October 2026; derived figures are our arithmetic, labelled as such. MoatSCORE read live from the Moat Screener on 24 October 2026. No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.