Coforge Target Price Set at Rs 1900 by Choice Institutional Equities

Coforge's Q4FY26 Performance Reinforces Confidence in Growth and Margin Trajectory

Coforge's latest quarterly performance has reinforced confidence in its growth and margin trajectory, supported by strong deal momentum, robust client mining, and a healthy executable order book. The company's margin expansion to 16.6% highlights effective cost control and early benefits from AI-led efficiency. This strategic pivot towards higher-quality, margin-accretive growth may keep near-term growth (Q1FY27) subdued, but it reflects a deliberate move towards more profitable ventures.

Strong Visibility for FY27E

Coforge's continued traction in large deals, Encora-led synergies, and scaling up AI capabilities provide strong visibility for FY27E. This, combined with improving profitability and cash conversion, further strengthens the investment case. The company's shift towards outcome-based delivery through Agentic AI and "Mod Squads" has evolved it into a high-quality, margin-accretive growth story, potentially outperforming its peers.

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Revenue and Earnings Growth Projections

We expect Coforge's Revenue, Earnings Before Interest and Tax (EBIT), and Profit After Tax (PAT) to grow at a Compound Annual Growth Rate (CAGR) of 21.2%, 25.7%, and 29.9% respectively over FY26-FY29E.

Investment Recommendation

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We reiterate a BUY rating for Coforge with a Target price of INR 1,900 based on FY28E Earnings Per Share (EPS) of INR 67.8.