share market
The impact of the June quarter results of IT company Coforge was immediately visible in the stock market. The company released its results on the night of 27th July and the very next day vigorous buying of its shares started. By 1:18 pm on Monday, the share rose by about 10.15% to Rs 1,683.90. The company has also announced an interim dividend of Rs 4 per share along with the quarterly results. This was the reason why investors' inclination towards shares seemed to be increasing.
Why can't comparison be made with previous results this time?
Coforge has also included Encora business data for the first time in its quarterly results. Therefore, the company has clearly said that these figures cannot be compared directly with the previous March quarter or the June quarter of last year. This is because now the business of the company has become bigger than before and this also includes the effect of acquisitions.
Earnings increased, but profits decreased slightly
The company's revenue in dollar terms increased by 21.1% to $592 million in the June quarter. The company's income in rupee terms increased by 24.2% to Rs 5,527.7 crore. However, the company's net profit declined by 15.3% to Rs 518.6 crore. The reason for this was not weakness in business, but some big expenses. Rs 61.3 crore was spent on the acquisition of Encora and its integration with the company. Apart from this, legal expenses of Rs 5 crore and additional provision of Rs 10.8 crore were also made. Due to these expenses, the full impact of the foreign exchange gain of Rs 22.1 crore could not be reflected in the profit.
Margin decreased slightly, but better than expected
The company's EBIT margin stood at 16%, whereas it was 16.5% in the March quarter. That means there was a slight decline in it. Despite this, it was better than the company's estimate of 15.5% for the whole year. The company said that its exit from the low-profit $15 million government project was part of a pre-planned plan. Data center disinvestment of $4 million also had an impact on the quarterly results. If these special expenses are excluded then the organic growth of the company looks better.
Dividend also announced
Coforge received new orders worth $691 million in the June quarter. After this the total order book of the company increased to $ 222.8 million. This has increased the hope that the business will remain strong in the coming times. The company has also announced an interim dividend of Rs 4 per share for investors. Its record date has been fixed as August 2. However, so far this year the company's stock is down about 3% and is trading about 20% below its 52-week high of Rs 1,938.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money related decisions.
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