🔍 At a Glance
Coforge has done a full Dhoni-style reinvention — from NIIT Tech’s humble days to a PE of 73x, all while waving goodbye to its original promoter (NIIT Ltd) and onboarding big boys like Hulst BV, only for them to ghost us in 2023. Revenues have tripled in 5 years. Net profits? Doubled. So, where’s the catch? Hint: margins, debt, and valuation.
📊 5-Year Financial Performance (Consolidated)
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS (₹) | ROCE % |
|---|---|---|---|---|---|
| 2021 | 4,663 | 466 | 17% | 15.04 | 25% |
| 2022 | 6,432 | 715 | 17% | 21.73 | 32% |
| 2023 | 8,015 | 745 | 16% | 22.72 | 31% |
| 2024 | 9,179 | 836 | 16% | 26.14 | 29% |
| 2025 | 12,051 | 936 | 14% | 24.29 | 21% |
🎯 Revenue CAGR: 26%
📉 Profit CAGR: 15%
📉 Margin Compression: 17% → 14%
📉 ROCE Tanked: From 32% to 21%
They’re growing topline like a tech startup…
…and growing debt like a PSU.
🔧 Business Model Breakdown
- Core Vertical: IT services, custom software development
- Key Clients: British Airways, ING, SEI, Sabre, SITA
- Geography: 100% export-oriented, USD exposure heavy
- Revenue Mix (FY25 est.):
- BFSI – 32%
- Travel & Transport – 20%
- Healthcare – 18%
- Others – 30%
🔍 Zero India exposure = Great for USD hedging
❌ Also means domestic IT growth story = irrelevant here
📅 Quarterly Results – FY25
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS (₹) |
|---|---|---|---|---|
| Q1 | 2,401 | 139 | 12% | 3.99 |
| Q2 | 3,062 | 234 | 13% | 6.06 |
| Q3 | 3,258 | 256 | 13% | 6.45 |
| Q4 | 3,410 | 307 | 15% | 7.81 |
📈 TTM Revenue Growth: 31%
📉 TTM Profit Growth: Just 3%
⚠️ Margin leakage throughout FY25
🧮 Valuation Check: This Ain’t SaaS, Bro
| Metric | Value |
|---|---|
| CMP | ₹1,840 |
| EPS (TTM) | ₹24.29 |
| P/E | 73.6x |
| Book Value | ₹191 |
| P/B | 9.6x |
| Dividend Yield | 0.83% |
Infosys: 26x PE
TCS: 25x PE
Coforge: 73x PE 💀
So what justifies it?
- Double-digit growth? ✅
- High margin? ❌
- High ROCE? Slipping… ❌
- IP-led SaaS? ❌
This isn’t Snowflake. It’s a hardworking IT outsourcer with British Airways as its favorite cousin.
🧾 Balance Sheet Breakdown – FY25
| Metric | Value |
|---|---|
| Net Worth | ₹6,379 Cr |
| Debt | ₹1,070 Cr |
| Debt/Equity | 0.17 |
| Cash Reserves | ₹464 Cr |
| Capex (FY25) | ₹2,448 Cr (!!) |
| ROCE | 21% |
| Working Capital Days | 58 |
📈 Cash from Ops: ₹1,237 Cr
📉 Cash from Investing: -₹2,448 Cr
➕ Big infra bets → Data centers, tech infra, acquisitions?
📉 Shareholding Drama: The Great Exit
| Category | Mar 2021 | Mar 2023 | Mar 2025 |
|---|---|---|---|
| Promoter | 61% | 30.16% | 0% 😱 |
| FII | 21% | 25.4% | 40.2% |
| DII | 17% | 32.2% | 49.9% |
| Public | 1% | 12.2% | 9.8% |
🚪 Promoters exited
💰 FIIs + DIIs = full custody
🤝 Retailers = just observers
🧠 EduInvesting Fair Value Range — Because PE > 70 Is a Crime
Method 1: Normalized PE
- EPS TTM: ₹24.3
- Assign PE range: 30x – 40x (generous!)
🎯 FV = ₹729 – ₹972
Method 2: ROCE Justified Multiple
- ROCE = 21%
- Assign P/B range: 4.5x – 6x
🎯 Book = ₹191 → FV = ₹860 – ₹1,146
✅ Fair Value Range = ₹860 – ₹1,150
🔺 CMP = ₹1,840
⚠️ Overvalued by 60–110%
🤓 TL;DR
✅ Strong revenue growth (5Y CAGR 26%)
✅ Capex-heavy, future-facing investments
✅ British Airways + BFSI = loyal clients
❌ Margin compression: OPM down to 14%
❌ Promoters fully exited
❌ ROCE falling, debt rising
❌ PE 73x = delusion, not conviction
🎯 EduInvesting Verdict
Coforge is the startup that became corporate but still wears startup T-shirts and quotes Steve Jobs.
It’s performing… but not enough to justify the valuation insanity.
Unless you expect 2x earnings jump in 2 years — this is a PE rerating waiting to happen.
🧠 Smart money already knows.
💸 Retail FOMO will be the last to find out.
✍️ Written by Prashant | 📅 18 June 2025
Tags: Coforge, NIIT Tech, IT Services, British Airways, Software Stocks, High PE Stocks, EduInvesting Fair Value
