Coforge's Q4 margin rebounds as tax benefit lifts profit 116.79%
Revenue grew 6.26% QoQ while expenses rose 3.35%, lifting operating margin 2.25 percentage points to 19.69%.
Filed 05 May 2026, 16:58 IST · after market close · Coforge Ltd (COFORGE)
Key takeaways
- Consolidated operating margin expanded 4.24 percentage points YoY as revenue grew 30.51%, faster than expenses at 23.97%.
- Net profit rose 116.79% YoY to Rs 666.2 cr, helped by a tax rate that swung to a 6.59% benefit from 22.22%.
- The stock gained 9.55% on the reaction day, well above its 3.04% median absolute move after the past eight results.
Price around the results
Revenue momentum translated into a sharper Q4 margin
Consolidated revenue grew 6.26% QoQ and 30.51% YoY, while expenses rose more slowly at 3.35% and 23.97%, respectively. That operating leverage lifted operating profit 20.04% QoQ and 66.32% YoY, with margin expanding 2.25 percentage points sequentially and 4.24 percentage points YoY.
Tax benefit materially improved reported profit quality
Net profit growth outpaced pre-tax profit growth because the tax rate fell 29.36 percentage points QoQ and 28.81 percentage points YoY, turning into a reported 6.59% benefit. Other income was negative at Rs 31.5 cr and represented -5.04% of pre-tax profit, so it did not support earnings. The tax benefit, rather than operating performance alone, was therefore a significant contributor to the 116.79% YoY rise in net profit.
Margin recovered from Q3 and matched the IT peer median
Operating margin recovered to 19.69% from 17.44% in Q3FY26, reversing the previous quarter's decline from 18.38%. Among 19 Information Technology peers that had reported the quarter, Coforge's margin matched the sector median of 19.69%.
Market reaction was unusually positive for Coforge
The results were filed after market close, and the stock gained 9.55% on the reaction day and 10.98% over five sessions. That was well above the 3.04% median absolute move across Coforge's past eight results, when five reactions were positive and three were negative.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,450 cr | ₹4,188 cr | +6.26% | +30.51% |
| Other income | ₹-32 cr | ₹-134 cr | +76.44% | — |
| Expenses | ₹3,574 cr | ₹3,458 cr | +3.35% | +23.97% |
| Operating profit | ₹877 cr | ₹730 cr | +20.04% | +66.32% |
| Operating margin (%) | 19.69% | 17.44% | — | — |
| Interest | ₹40 cr | ₹42 cr | -3.61% | +0.76% |
| Depreciation | ₹180 cr | ₹171 cr | +5.39% | +43.54% |
| Profit before tax | ₹625 cr | ₹384 cr | +62.68% | +58.91% |
| Tax | ₹-41 cr | ₹88 cr | — | — |
| Net profit | ₹666 cr | ₹297 cr | +124.54% | +116.79% |
| EPS (₹) | ₹18.23 | ₹7.45 | +144.70% | -53.28% |
Operating margin of 19.69% compares with a Information Technology sector median of 19.69% across 19 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +9.55% | +8.31% |
| Next session | +9.97% | — |
| 5 sessions | +10.98% | +13.56% |
| 15 sessions | +18.79% | — |
| 30 sessions | +26.88% | — |
Volume on the results session was 9.42× its 20-day average.
What to watch
- Whether operating margin holds above 19.69% after the 2.25-percentage-point QoQ recovery.
- Whether revenue continues to grow faster than expenses, after the latest 6.26% versus 3.35% QoQ increase.
- Whether the tax rate moves back from the reported 6.59% benefit.