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Coforge Acquires 54% Stake in Cigniti Tech at ₹1,415 per Share

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Synopsis:

Coforge is set to acquire a 54% stake in Cigniti Technologies, expecting to reach $2 billion in revenue by FY27. The acquisition aims to expand into new verticals, strengthen US market presence, and tap into AI opportunities. In Q4FY24, Coforge reported a consolidated revenue of ₹2,358.50 crore, up 8.6%, and a PAT of ₹223.70 crore, up 94.8% YoY. The board declared a fourth interim dividend of ₹19 per share.

Coforge News Today

Coforge's board has approved the acquisition of a 54% stake in Cigniti Technologies at ₹1,415 per share, expecting completion by Q2FY25 pending regulatory approvals. The move aims to strengthen Coforge's growth to $2 billion by FY27 and enhance operating margins by 150-250 bps.

Additional Read: Share Market Updates

Rationale Behind the Acquisition

The acquisition is motivated by three main factors: creating scaled-up verticals in retail, technology, and healthcare; expanding presence across US markets; and seizing AI-driven opportunities in specialised assurance services.

Financial Performance

In the March quarter of FY24, Coforge reported a consolidated revenue of ₹2,358.50 crore, marking an 8.6% increase from the previous year. Profit after tax (PAT) stood at ₹223.70 crore, reflecting a significant 94.8% YoY growth. The company's EBITDA margin stood at 19%, sequentially higher by 102 bps.

Dividend Declaration

The company declared a fourth interim dividend of ₹19 per equity share for the financial year 2023-24, with a record date set for May 15th.

CEO's Perspective

CEO Sudhir Singh expressed confidence in the company's growth trajectory, citing a $400 million deal signed in Q4, a 56% YoY increase in order intake, and sequential margin improvement, positioning Coforge for robust growth in fiscal year 2025 with expanded margins.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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