Shares of Coforge Ltd. fell sharply by nearly 6% on August 8, 2025, after its key client, Sabre Corporation, announced a significant cut in its full-year guidance. The drop in Coforge’s stock came on the back of Sabre’s weak Q2 2025 performance and lowered outlook for 2025, raising concerns over Coforge’s near-term revenue momentum given Sabre’s importance as a client.
Sabre, a major player in the global travel technology sector, reported Q2 revenue of $687 million, up only 1% year-on-year, missing its own “low single-digit” growth projection. The company posted normalized adjusted EBITDA of $127 million, falling short of the expected ~$140 million. Its pro forma free cash flow slipped into negative territory at ($2 million). Disappointed investors reacted sharply, sending Sabre’s stock tumbling 35% overnight on the Nasdaq.
Alongside the results, Sabre revised its calendar year 2025 guidance downward. Revenue growth expectations were cut to flat-to-low single-digit growth, compared to the earlier high single-digit forecast. Air distribution volume growth projections were reduced to 4–10%, down from the previous double-digit estimate. Adjusted pro forma EBITDA guidance was slashed to $530–570 million from $630 million earlier. These changes point to a more cautious outlook amid weaker-than-expected performance in the travel technology industry.
The guidance cut is particularly significant for Coforge due to its deep ties with Sabre. In March 2025, Coforge signed a $1.56 billion, 13-year contract with Sabre to enhance product delivery and develop AI-enabled solutions, making Sabre one of its largest clients. The deal had a major positive impact on Coforge’s travel, transportation, and hospitality vertical, which recorded a 31% sequential growth in Q1 FY26. This strong performance in the travel segment had helped offset weaker trends in areas like banking and financial services (BFSI).
However, Sabre’s reduced growth projections have sparked investor concerns about Coforge’s future revenue growth. On August 8, Coforge’s shares fell in the range of 4.17–6%, trading between ₹1,605 and ₹1,633, valuing the company at around ₹10,108 crore. The decline has wiped out over 10% of Coforge’s market value in just four trading sessions, and the stock is now down 17% over the past month.
Despite the market reaction, Coforge delivered strong Q1 FY26 results for the quarter ended June 2025. Revenue came in at $442.4 million, up 9.6% sequentially and 8% in constant currency terms. EBITDA margin improved by 61 basis points to 17.5%, while net profit surged 21.5% sequentially and 138.4% year-on-year to ₹317 crore. The company also secured $507 million in new deals during the quarter, with an executable order book of $1.55 billion, representing a 46.9% year-on-year increase. Much of this growth was fueled by the ramp-up of the Sabre deal, making the latest guidance cut more concerning for investors.
The broader IT sector has been facing volatility due to cautious client spending and project delays. Midcap IT firms like Coforge have felt the pressure, with the Nifty IT index falling by as much as 2% earlier this year, reflecting sector-wide weakness.
Looking ahead, Coforge remains optimistic about its long-term growth strategy. The company has set a target of $2 billion in revenue by FY27, with the Sabre contract and recent acquisitions such as Cigniti Technologies and Xceltrait Inc. forming key pillars of this plan. Coforge continues to enjoy a low attrition rate of 11.3% and a focus on niche sectors like travel and banking, complemented by its investments in AI-driven solutions.
Analysts remain divided in their outlook. While acknowledging Coforge’s strong operational performance, many have adopted a cautious stance due to the lack of specific FY25 growth guidance and potential integration risks from recent acquisitions. Some analysts had already downgraded the stock earlier in 2024, and the latest developments with Sabre are likely to keep sentiment muted in the near term.
In the short run, Sabre’s guidance cut introduces uncertainty for Coforge’s travel sector revenue and could weigh on investor confidence. Over the longer term, however, Coforge’s robust order book, sector-focused strategy, and technology-led growth initiatives position it well, provided the company can effectively navigate client-specific risks and broader industry headwinds.
