Coforge shares slide 6% after major client’s weak quarterly results rattle investors

Coforge shares are down over 16 percent since the beginning of the year.

Shares of Coforge slipped 6 percent to Rs 1,605 in the afternoon on August 8, sinking for the third time in four sessions and wiping over 10 percent in just four days, after key client Sabre Corp plunged 35 percent on the Nasdaq overnight following a lacklustre quarterly report.

Sabre’s revenue and EBITDA for the current quarter came in below earlier projections, prompting the travel technology firm to sharply scale back its full-year outlook. Growth in Air Distribution Volumes is now expected at just 4–10 percent, compared to its previous double-digit forecast. Revenue guidance was cut to flat-to-low single-digit growth from high single digits earlier, while adjusted pro forma EBITDA guidance was lowered to $530–570 million from $630 million.

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Under a 13-year agreement, Coforge is a key partner for Sabre, tasked with bolstering product delivery and building AI-powered solutions.

The midcap IT firm posted an 8 percent growth in revenue in constant currency terms for the June quarter. The performance also sharply contrasted with Persistent Systems and LTIMindtree, which reported CC growth of 3.3 percent and 0.8 percent, respectively.

A key growth driver this quarter was the ramp-up of Coforge’s $1.6 billion contract with Sabre, which powered a 31 percent sequential surge in its travel, transportation, and hospitality vertical. This helped offset weakness in its BFSI segment, where banking revenue slipped 1.1 percent and insurance saw a modest 1 percent uptick in US dollar terms.

The company’s rupee revenue rose 8.6 percent sequentially to Rs 3,687 crore. On the margin front, EBITDA improved by 60 basis points to 17.5 percent, while EBIT margin held steady at 13.2 percent.

Coforge secured new deals worth $507 million during the quarter. While this is significantly lower than the $2.1 billion haul in the previous quarter, the earlier number included the mega Sabre deal. Importantly, the executable order book for the next 12 months now stands at $1.54 billion—up 3 percent sequentially and a robust 44 percent year-on-year.

At about 1:40 am, shares of the company were trading at Rs 1,614, lower by 5.2 percent from the last close on the NSE. Coforge shares are down over 16 percent since the beginning of the year.

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