Coforge lifts FCF conversion target to >100%, flags strong Encora payoffs
First Encora quarter delivered ₹5,528 cr revenue and $2.2B order book; now management sees FY27 FCF >100% of PAT, EBIT margin above 15.5%.
— 5 earlier stories on Coforge Ltd. →What's new
- Raised FCF conversion guidance to >100% of PAT from 70-80% range set in October 2025.
- EBIT margin guidance set at 15.5% or higher for FY27.
- Order book at all-time high of $2.2 billion, next-12-month executable.
- Encora cost savings ahead of plan; acquisition to add to earnings per share in FY27.
Why this matters
The guidance reset is significant. FCF >100% implies strong cash generation from the combined entity, and the margin target shows confidence in Encora integration. With a $2.2B order book, revenue visibility is high. At a P/E of 42x trailing earnings, the market is pricing in this momentum; the new guidance gives a clearer pathway.
What we're watching
- Whether FCF conversion sustains above 100% through the year.
- EBIT margin trajectory relative to the 15.5% floor.
- Encora's revenue contribution in subsequent quarters.
The full read
Coforge delivered a ₹5,527.7 cr first Encora quarter with revenue up 49% YoY and an all-time-high order book of $2.2 billion. But the real news came on the concall. Management raised FY27 free cash flow conversion guidance from 70-80% to >100% of PAT — a step-change that signals the combined entity is generating cash faster than expected. The EBIT margin target of 15.5% or higher reinforces confidence in integration, which management says is ahead of plan and already adding to earnings per share. A 42x trailing P/E leaves little room for error, but the new guidance gives a clearer runway. The next test is whether execution sustains this pace.
Questions answered
- How much did Coforge report in revenue for Q1 FY27?
- Consolidated revenue was ₹5,527.7 crore ($55,277 million), the first full quarter including Encora.
- What is the new free cash flow conversion guidance and how does it compare to the old one?
- Management raised FY27 FCF conversion to over 100% of PAT, sharply up from the 70-80% range outlined in October 2025.
- What is the EBIT margin guidance for FY27?
- Coforge guided for consolidated EBIT margin of 15.5% or higher for the full fiscal year.
- How big is the order book and what does it indicate?
- The next-12-month executable order book is $2.2 billion, an all-time high, indicating strong near-term revenue visibility.
- How is the Encora acquisition performing post-integration?
- Cost savings are ahead of plan, and management expects the deal to add to earnings per share in FY27.
Coforge Ltd.
Latest quarter · Mar 2026
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Story so far
All notes on COFORGE →- 28 Jul 2026 · 9:36 AM IST Coforge lifts FCF conversion target to >100%, flags strong Encora payoffs
- 1d ago Coforge revenue jumps 49% as Encora kicks in
- 1d ago Coforge revenue jumps 49% in first Encora quarter to ₹5,527.7 cr
- 1d ago Coforge posts first Encora-inclusive quarter with ₹5,528 cr revenue
- 1d ago Coforge reports first Encora-inclusive quarter; revenue jumps 49% to ₹5,527 cr