Coforge's profit jumps 56.5% to Rs 588 crore after it bought a US company
The Noida IT firm's first full quarter with Encora brought record big deals and a higher margin target, while larger IT firms barely grew.
Picture two IT companies in the same street. Two of the biggest grew their dollar sales by less than 1.5% in three months. A mid-size neighbour grew by 10%. On Friday, 23 October 2026, Noida's Coforge said its profit for July to September jumped 56.5% to Rs 588 crore. The secret ingredient is a company it bought this year.
First, who is Coforge?
Coforge is an IT services company. That means big companies around the world pay it to build and run their software, data and cloud systems. Think of it like a team of expert plumbers and electricians, but for computers. A bank or an airline calls them in when it needs new apps or wants its old systems to work better.
The company is headquartered in Noida. Its big new deals this quarter came from North America, Europe and Australia. At the end of September it had 47,365 people working for it, after adding 1,137 in the quarter.
The numbers, in plain words
A quarter is three months, like one term at school. Coforge's second quarter of this financial year ran from July to September 2026.
- Revenue is all the money that comes in from customers, like every rupee a samosa stall collects in a day. Coforge's revenue rose 53.6% to Rs 6,170.8 crore, from Rs 4,016.4 crore a year earlier.
- Profit is what is left after paying for everything: salaries, rent, tax and more. It rose from Rs 375.8 crore to Rs 588 crore.
- Put simply, out of every Rs 100 that came in, about Rs 9.5 was left as profit.
Compared with the three months just before (April to June), profit rose 13.4%. In dollars, revenue was $652.2 million.
So why did sales jump by half?
A big part of the answer is shopping. In December 2025, Coforge agreed to buy Encora, a Silicon Valley based firm that builds AI-led engineering, cloud and data systems, for $2.35 billion. It was the largest takeover by an Indian IT company in engineering research and development, and the second largest buy ever by an Indian IT services firm.
It was an "all-stock" deal. That means Coforge did not pay mainly in cash. It paid with new Coforge shares. Imagine buying your friend's cycle shop by giving him a part of your own lemonade stall instead of money. Encora's old owners got a 20% stake in the combined company.
The purchase was completed in April 2026, and Encora's numbers started joining Coforge's in May. So July to September was the first full quarter with Encora inside. The Economic Times reported that Encora's contribution was a major reason for the revenue growth, along with large deals.
This also means the 53.6% jump is not a like-for-like comparison. It is a bit like comparing your cricket team's score after two new star players joined. Coforge said its organic growth, meaning growth from the business it already had, without the new purchase, was 3.8% in constant currency compared with the previous quarter. Constant currency means the number is worked out as if exchange rates had not moved.
Eight big orders in one quarter
Coforge signed eight large deals in the quarter, the most it has ever signed in a single quarter. The total value of new orders was $1.04 billion.
It also has an order book for the next 12 months of $2.38 billion, up 45% from a year ago. An order book is like a tailor's diary full of confirmed orders: work that is already promised and still to be stitched.
Chief executive Sudhir Singh said the results have put the company "firmly on course to be the industry growth leader for the third year running", Business Standard reported.
What is a margin, and why did it go up?
A margin is the part of each rupee that stays with the company after paying running costs. Coforge talks about EBIT margin, which is profit before interest and tax are taken out. If a chai stall sells Rs 100 of tea and spends Rs 84 on milk, sugar, gas and the helper's pay, the margin is 16%.
Coforge raised its target for this financial year from 15.5% to 16%, and said it expects to reach 17% next year. Singh linked this to using AI inside the company's own work as well as for clients. On the earnings call he said the margin gains were coming from existing fixed price projects where AI is being added, Business Standard reported. In a fixed price project, the client pays one agreed amount. So if the work gets done faster, more of that money stays with the company.
Singh also said margin growth at Encora is ahead of plan. Two more health signs from the same report: 82.4% of its people were working on paid client projects (this is called utilisation), and attrition, the share of people who left in the last 12 months, stayed at 10.4%.
Meanwhile, the giants had a slow term
The same week, the biggest Indian IT companies reported their slowest second-quarter growth in three years, Mint reported. Compared with the previous quarter, Infosys grew 1.24% in dollar revenue and TCS grew 0.24%. Mint said clients are pulling back on tech spending they do not urgently need, partly because of tensions in West Asia.
Coforge's 10.1% dollar growth looks far ahead of them. But remember, most of that gap came from Encora joining.
Why this matters to you
If you hope to work in IT one day, this quarter shows two ways a company can grow. One is to win more work from existing clients. The other is to buy another company and its clients. Coforge did both: it added Encora and also signed a record number of large deals.
It also shows how AI is changing the money side of IT. When tools help finish a fixed price project faster, the company keeps more of each rupee.
Next time someone says "IT is slow right now", the honest answer is: some of it is, and some of it is growing by buying other companies.
Sources
- Business Standard: Coforge Q2 results, net profit up 56.5% to Rs 588 crore
- The Economic Times: Coforge Q2 net profit jumps on Encora deal
- Deccan Herald: Coforge Q2 net profit up 56.5% to Rs 588 crore
- Analytics India Magazine: Coforge revenue rises 54%
- Business Standard: Coforge to buy Encora for $2.35 billion
- Mint: Infosys caps dull second quarter for Indian IT
- Cover photo: office towers in Noida's Sector 62, by Sarcastic_Speedster, CC BY-SA 4.0
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