Coforge Shares Rise 8% Following Strong Q4 Earnings, Brokerages Increase Estimates
Coforge Ltd Shares Surge Over 8 Percent After Strong Q4 FY26 Earnings
Shares of Coforge Ltd jumped 8.11 percent in morning trade on Wednesday after the IT services company reported a strong set of Q4 FY26 earnings, with profit sharply beating Street expectations. Brokerages turned more bullish on the company's growth and margin outlook.
The rally came after Coforge Ltd reported a strong Q4 FY26 performance, with net profit jumping 145 percent year-on-year to Rs 612 crore, sharply ahead of the CNBC-TV18 poll estimate of Rs 448 crore. Revenue rose 30 percent to Rs 4,450 crore, while EBITDA margin expanded to 16.6 percent, against 14.6 percent estimated by the Street.
| Brokerage | Rating | Target Price (Rs) | Earnings Estimates (FY27/FY28) |
|---|---|---|---|
| Nomura | Buy | 2,100 | 2-5% increase |
| Jefferies | Buy | 1,860 | 9-11% increase |
| HSBC | Buy | 1,710 | No significant increase mentioned |
Coforge also reported an order intake of $648 million and signed five large deals during the quarter, while its executable order book for the next 12 months rose 16.4 percent year-on-year to $1.75 billion. CEO Sudhir Singh said the company entered FY27 with strong momentum after delivering 29.2 percent year-on-year growth and a 370 basis points expansion in EBIT margin.
Brokerages largely remained positive on the stock following the earnings announcement, citing strong margins, improving cash flows and a healthy order book pipeline. Nomura maintained a "Buy" rating on Coforge stock, highlighting the company's strong executable order book and potential for further margin improvement over the medium term.
Jefferies also retained its "Buy" rating, assigning a target price of Rs 1,860 per share. The brokerage said the Q4 beat was driven by higher margins and strong free cash flow generation, and projected a 23 percent EPS CAGR.
HSBC too maintained a "Buy" rating with a target price of Rs 1,710 per share. The brokerage said revenue slightly missed expectations but margin and free cash flow guidance improved, and cautioned that growth could moderate due to Coforge's exit from lower-margin segments.
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Investor Takeaway
Investors should consider Coforge as a potential growth stock due to its strong Q4 earnings and bullish brokerage estimates.
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