Client concentration risk – what the Q2 2025 release tells us
Nagar Nagarro’s Q2 2025 update highlights a modest 3.2 % YoY revenue increase to €252 m and a healthy 14 % rise in gross profit despite a challenging macro backdrop. The press release, however, does not disclose any single‑client revenue percentages or a top‑client list, which suggests that the company does not view any one client as material to its earnings narrative. In practice, most global digital‑engineering firms—especially those listed on European exchanges— disclose “client concentration” only when a single account contributes > 10 % of revenues, as required by IFRS/GAAP. The absence of such a disclosure in the earnings release and in the accompanying half‑year report is a positive sign that Nagarro’s revenue is reasonably diversified across multiple industries (automotive, healthcare, finance, etc.) and geographies (Europe, North America, APAC).
Trading implication
Because the company has not highlighted any material client concentration, the risk of a sudden revenue dip from the loss of a single large customer appears limited at present. This reduces a key “revenue‑stability” head‑wind for the stock, making the recent modest top‑line growth more sustainable. Traders can therefore treat the current 60 % sentiment rating as being more driven by macro‑economic headwinds rather than idiosyncratic client risk. For a bullish stance, consider buying on a pull‑back if the stock retests the 50‑day moving average (≈€22‑23) with volume support—this would capture upside potential while the underlying fundamentals remain resilient. Conversely, if a future filing (e.g., 10‑K/annual report) later reveals a single client accounting for >10 % of revenue, re‑evaluate the position for higher downside exposure.