Coforge Ltd. share price target

We recommend a BUY rating on the stock and assign a 31x P/E multiple to its FY24E earnings of Rs 177.7/share which gives a TP of Rs 5,570 /share. TP implies an upside of 10% from CMP.

COFORGE reported an organic revenue growth of 3.9% QoQ CC in 2QFY22. Including the one-month incremental contribution from SLK Global, revenue growth stood in line at 6.6% QoQ (USD). Growth was driven by deal rampups in the Americas (+30% QoQ, including the impact from SLK Global). It reported an order intake of USD285m (-10% QoQ/+42% YoY), implying a book-to-bill ratio of 1.3x. This also included three large deals. EBITDA margin (pre-RSU) increased by 250bp QoQ to 18.6% (est: 18.2%), led...

Adjusted EBITDA margin target maintained at 19% for FY22, +100bps YoY. but above consensus estimates (Cons: 5.8%). Miss in revenue was led by to flattish growth in insurance vertical because of delayed Advantage Go license realization which is expected to bounce back in Q3 aiding both...

Robust Q2 revenue growth of 6.6% QoQ USD led by BFSI; EBIT margin in line at 14.8% (+230bps QoQ)

executable order book of $645 mn 38.7% YoY 2) sustained strong large deal momentum with $105 mn milestone win this quarter, 3) Increased recognition in product engineering, 4) strengthening of sales team in other vertical...

Q1 strong with 16% QoQ USD revenue growth led by BFSI. EBIT margin in line at 12.6% (-107bps QoQ)

We recommend a BUY and assign 37x P/E multiple to its FY23E earnings of Rs 139.5/share which gives a TP of Rs 5,220 /share, implying an upside of 10% from CMP

Coforge Ltd (COFORGE) reported strong organic revenue growth of 7% QoQ CC in 1QFY22, above our estimates of 3% QoQ CC. Including the two months of revenue contribution from SLK, revenue growth stood at 16% QoQ (USD), far higher than our exp. of 10.3% QoQ. Growth was driven by deal ramp-ups in the Americas (+30% QoQ, including the SLK impact). It reported another quarter of strong order intake of USD318m (the highest ever), implying 1.6x book-to-bill. This also included three large deals, with one USD105m deal win. The EBITDA margin (pre-RSU) declined 110bps QoQ to 16.1%, weighed by...

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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 (17% of revenues), Insurance (31% of revenues), and Travel/ Transportation (19% of revenues). The company has around 115 active clients across US (46% of revenues), EMEA (40% of revenue) and Row (14% of revenues). The Company in 4QFY21 added 11 new clients and won 2 large...