Coforge pegs Encora integration costs at $10–15 million, synergies to kick in Q1FY27

Coforge

• Coforge expects $10-15M Encora integration costs, synergies from Q1 FY27
• Encora acquisition to boost Coforge's AI, data, and cloud services scale
• Coforge Q3 revenue up to Rs 4,188 crore, signed six large deals in the quarter

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Mid-tier IT firm Coforge expects Encora integration costs of $10 million to $15 million, with cost synergies kicking in from the first quarter of FY27, as it moves to close and integrate the US-based engineering services company after announcing the $2.35-billion acquisition.

Transaction is expected to close in April, with Coforge planning to move quickly on integration actions and synergy extraction, Coforge CEO and executive director Sudhir Singh said at the company’s Q3FY26 press meet.

“All synergies or at least most of the synergies to have been acted upon by the end of quarter one fiscal year 27… all integration costs to get booked across Q1 and Q2 of fiscal year 27,” he said.

The integration bill will include costs related to the deal and financing closure.

On December 26, 2025, Moneycontrol exclusively reported that Coforge is in advanced discussions to acquire Encora, potentially marking one of the largest transactions in the digital engineering space, citing sources.

Meanwhile, Coforge is positioning the Encora acquisition as a key strategic move to build scale in AI-led engineering, data services, and cloud services, while keeping focus on maintaining its margin trajectory.

During his prepared remarks, Singh reiterated that Encora will be a key building block in Coforge’s next phase, calling the acquisition a defining moment for the company as it looks to deliver what it describes as enterprise-grade AI at scale.

Coforge’s Q3FY26 financial performance, Singh clarified, does not reflect Encora’s contribution. “The financials that I shared do not include any impact of Encora. This is Coforge as a standalone,” he said, adding that Coforge’s current momentum will be significantly augmented after the transaction is consummated.

Coforge also reiterated that it has decided not to go ahead with a qualified institutional placement (QIP) to retire Encora’s debt, saying it has secured financing from a consortium of banks at a “middle single digit” interest rate, with a clear focus on avoiding earnings per share dilution.

Coforge Q3 Performance

The Noida-headquartered company reported its December quarter results in the early hours of Friday, January 23, with performance largely in line with Street expectations. In rupee terms, revenue from operations came in sequentially up to Rs 4,188 crore and broadly tracking the Rs 4,206 crore estimate from the CNBC-TV18 poll.

Earnings before interest and tax (EBIT) stood at Rs 559.4 crore, largely flat sequentially, while EBIT margins narrowed 60 basis points to 13.4 percent from 14 percent in the previous quarter. Analysts had pencilled in a sharper 80-basis-point contraction to 13.2 percent.

In constant currency terms, Coforge’s revenue grew 4.4 percent sequentially, ahead of the 3.5 percent growth anticipated by analysts. The company also signed six large deals during the quarter, taking total order intake for the December period to $593 million.