Coforge Ltd. share price target

We recently interacted with COFORGE’s CFO to understand the company’s growth outlook, execution strategy, and margin trajectory.

4QFY25 CC growth a tad below estimate but EBIT margin surprise +ve. FY25 organic rev. growth is likely in mid teen. FY26 hinted to be better.

Coforge continued to report a strong top-line performance in Q4FY25. Management acknowledged the challenging demand environment but reiterated its goal to reach USD 2bn by FY27 on the back of record-high deal wins in FY25, strong deal pipeline and its ability to proactively shape large deals.

COFORGE reported a strong 4QFY25 revenue growth of 3.4% QoQ in CC terms, above our estimate of 3.0% QoQ CC. Reported revenue (adjusted for disc. operations) stood at USD404m (up 3.3% QoQ/43.6% YoY).

Coforge reported strong topline growth of 8.4% QoQ (CC), well ahead of our estimate of 4.7%. Growth was healthy across most horizontals, verticals, and geographies.

3QFY25 was blockbuster quarter 8.4% growth QoQ in CC terms (our estimate-2.8%. Belied seasonality)

COFORGE reported 3QFY25 strong revenue growth of 8.4% QoQ in CC terms, above our estimate of 4.9% QoQ CC. Reported revenue stood at USD397m (up 7.5% QoQ/40.8% YoY).

Coforge reported revenue of $369.4 million, up 26.8% q-o-q/32.8% y-o-y. Organic revenue stood at $309.8 million, up 5.5% q-o-q in constant currency terms, beating our estimate of $305.9 million.

Given the company's strong growth potential backed by robust deal wins and superior execution capabilities, we recommend a BUY rating on the stock.

COFORGE reported 2QFY25 organic revenue growth of 6.3% QoQ in USD terms, above our estimate of 4.3%. It reported an organic CC QoQ growth of 5.5% (consol. CC QoQ growth of 26.3%).

We upgrade Coforge to Buy with revised price target (PT) of Rs. 8,480 (valued at 40x Sept26E EPS).
At CMP, the stock trades at 48.2/36.5/30.2x its FY25/26/27E EPS.

Given the company's strong growth potential backed by robust deal wins and superior execution capabilities, we recommend a BUY rating on the stock.

CEO believes demand has bottomed out. Industry demand commentary turns positive for the first time in the current cycle

Coforge reported an in-line set of results in Q1; revenue grew 1.6% QoQ (similar in cc terms), whereas adj. EBITDAM declined by 100bps to 17.9%.

COFORGE reported 1QFY25 revenue growth of 1.6% QoQ in CC terms, in line with our estimate. Reported revenue stood at USD291m (up 1.6% QoQ/7.2% YoY).

Coforge reported a miss on CC Rev growth of 1.6% QoQ (DE:1.9%) due to decline in BFS (-4%). Adj. EBITDA margin down 111bps QoQ to 17.9% (DE:18.1%) due to visa & onsite ramp-up (wage hike moved to Q2).