Coforge Surges on Stellar Q2 FY27 Earnings as IT Mid-Cap Recovery Gains Momentum

The Quick Take

• Coforge reported Q2 FY27 revenue growth of 28% year-on-year in constant currency, beating analyst estimates by ~400 basis points.
• Operating margins expanded to 17.2% from 15.4% year-ago, driven by automation-led efficiency gains and a richer deal mix.
• The company added four new $10M+ annual contract value accounts in the quarter, signalling healthy large-deal momentum.
• FY27 revenue guidance was raised to 25–27% constant-currency growth, above Street consensus of 22%.
• IT mid-cap peers KPIT (+2.1%) and Persistent Systems (+1.8%) rallied in sympathy on strengthened sector sentiment.

Coforge's Q2 FY27 results represent one of the strongest quarterly beats in India's IT mid-cap space this earnings season. Revenue in constant currency expanded 28% year-over-year — significantly ahead of the 24% consensus estimate — driven by robust demand in the banking, financial services, and insurance vertical and accelerating traction in AI-augmented application development. The decision to invest heavily in proprietary automation tooling over the past six quarters is now visibly flowing through to margin performance, with EBIT margins reaching 17.2% versus 15.4% in the year-ago period.

Deal activity has been particularly impressive. Coforge added four accounts exceeding $10 million in annual contract value, raising its total large-account count by nearly 20% year-on-year. This is a leading indicator of revenue visibility and is especially notable given that many larger-cap peers have reported muted deal activity amid client budget conservatism in Europe and North America. Coforge's differentiated positioning in insurance core transformation and government cloud migration in the US and UK is providing deal-flow insulation from broader demand headwinds.

The upgraded FY27 guidance of 25–27% constant-currency growth places Coforge at the top of the growth league table among listed Indian IT companies. The spillover effect was immediately visible: KPIT Technologies rose 2.1%, Persistent Systems gained 1.8%, and the Nifty IT index outperformed the Nifty 50 by 1.4 percentage points. Recurring revenue mix at 73% adds further confidence to earnings quality. For investors tracking the sector, the results reinforce the thesis that mid-cap IT names with specialised vertical depth can sustain superior growth even as large-cap IT faces pricing pressure.

Synthesized from 1 source.