Coforge Ltd. share price target

We recommend a BUY rating on the stock and assign a 24x P/E multiple to its FY24E earnings of Rs 177.8/share which gives a TP of Rs 4,200 /share. TP implies an upside of 15% from the CMP.

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We recommend a BUY rating on the stock and assign a 28x P/E multiple to its FY24E earnings of Rs 177.8/share which gives a TP of Rs 5,060 /share. TP implies an upside of 15% from CMP.

Background: NIIT Technologies rebranded to Coforge ltd is a leading global IT solutions organization. The Company focuses on three key verticals which are Banking and Financial Services (28% of revenues), Insurance (28% of revenues), and Travel/ Transportation (18% of revenues). The company has around 130 active clients across US (53% of revenues), EMEA (34% of revenue) and Row (13% of revenues). The Company in 3QFY22 added 13 new clients and won 1 large...

Adjusted EBITDA margin to be around 20.8% in Q4 (vs 19.5% in Q3) Organic growth is healthy at +4.6% QoQ USD, 5.7% QoQ CC and contribution days in Q3. Order intake is healthy at $247 mn (29% YoY, vs FY21 average of ~$195 mn) including one large 6-year deal of $45 mn from European Public sector client. Next 12 months' executable order book is $701 Mn, +2% QoQ,...

Q3 revenue grew 4.2% QoQ USD, roughly in line with estimate. Growth was driven by the BFS vertical with a modest uptick in travel

We recommend a BUY rating on the stock and assign a 37 x P/E multiple to its FY24E earnings of Rs 184/share to arrive at a TP of Rs 6,870/share, implying an upside of 15% from CMP.