Coforge Share Price Falls 6% After Sabre Corp’s Weak Results Shake Investor Confidence

Market Performance

Coforge share price slipped sharply by 6% to Rs 1,605 on August 8 during afternoon trading. This marks the third drop in four sessions, wiping out over 10% in just four trading days.

As of 1:40 PM, the stock was trading at Rs 1,614, registering a 5.2% decline from the previous NSE close. Since the beginning of the year, Coforge shares have declined over 16%.

Main News

The sharp fall in Coforge share price followed a significant drop in shares of its major client, Sabre Corp, which plunged 35% overnight on the Nasdaq after releasing disappointing quarterly results.

Sabre, a prominent travel technology firm, reported revenue and EBITDA figures below expectations and revised its full-year guidance downward:

• Air Distribution Volume Growth: Slashed to 4–10%, from earlier double-digit estimates
• Revenue Guidance: Now expected to be flat-to-low single-digit, down from high single-digit projections
• Adjusted Pro Forma EBITDA: Lowered to $530–570 million, from an earlier projection of $630 million

Company Details

Coforge holds a 13-year strategic partnership with Sabre Corp, focusing on enhancing product delivery and building AI-driven solutions.

Coforge reported solid quarterly performance in the June quarter, achieving an 8% revenue growth in constant currency terms, despite the underwhelming results from its key client.

This performance stands out when compared to other mid-cap IT peers:

• Persistent Systems: 3.3% CC growth
• LTIMindtree: 0.8% CC growth

A significant contributor to Coforge’s growth was the execution of its $1.6 billion deal with Sabre, driving a 31% quarter-on-quarter increase in the travel, transportation, and hospitality vertical.

Financial Highlights

Revenue

• Rupee Revenue: Increased 8.6% QoQ to Rs 3,687 crore

EBITDA

• EBITDA Margin: Improved by 60 basis points, reaching 17.5%

EBIT Margin

• EBIT Margin: Held steady at 13.2%

Vertical-wise Performance

• Travel, Transportation, and Hospitality: Jumped 31% QoQ
• BFSI Segment:
  • Banking Revenue: Declined 1.1%
  • Insurance Revenue: Saw a modest 1% increase in US dollar terms

Order Book and Deals

• New Deals Signed: Worth $507 million this quarter
• Previous Quarter Comparison: Significantly lower than $2.1 billion, which had included the large Sabre deal
• Executable Order Book (Next 12 Months):
  • $1.54 billion, up 3% QoQ
  • Up 44% YoY, indicating robust long-term demand

Summary of the Article

The Coforge share price witnessed a sharp decline following disappointing quarterly results from its major client, Sabre Corp. Despite this external shock, Coforge demonstrated strong financial performance in the June quarter, with healthy revenue growth, steady margins, and a strong executable order book.

The travel vertical, powered by the Sabre deal, helped offset weakness in other segments. While the current dip in share price reflects investor reaction to Sabre's outlook, Coforge's operational metrics and execution capability remain noteworthy.