Indian IT firm Coforge’s profit misses expectations on higher costs

India’s Coforge, opens new tab posted fourth-quarter profit below estimates, as the IT services company was hurt by increased expenses.

Its consolidated net profit rose 16.8% to 2.61 billion rupees ($31 million) for the quarter ended March 31, below analysts’ expectation of 2.81 billion rupees, according to data compiled by LSEG.

A spike in Coforge’s acquisition and merger related costs pushed up its total expenses by 49%.

Its revenue from operations rose to 34.1 billion rupees from 23.18 billion rupees last year, but came in below analysts’ expectation of 35.20 billion rupees.

Coforge’s order intake for the quarter rose to $2.1 billion, from $774 million last year.

Key context

Coforge has been trying to boost its revenue through various acquisitions and had recently completed the purchase of India-based Cigniti Technologies, opens new tab and U.S.-based Rythmos and Xceltrait.

In contrast, rival Mphasis, opens new tab which beat, opens new tab profit expectations last week on strong deal wins.

However, larger peers, Tata Consultancy Services, opens new tab and Infosys, opens new tab have flagged a difficult year ahead as the global economic uncertainty propagates cautious client spending.

The $283 billion-sector is facing challenges due to U.S. President Donald Trump’s unpredictable tariff policies, which are causing uncertainty and delays in technology spending decisions among its major clients.