Coforge (COFORGE IN) – Q4FY26 Result Update – Strong execution, doubling down on AI opportunities – BUY
Published on 06 May 2026
Management sees AI as a structural growth driver, expanding opportunities into modernization, agentic AI, and high-margin managed services. The completion of the Encora integration strengthens company’s engineering depth and AI-led execution capabilities. Factoring in earlier Encora consolidation, we revise our USD revenue growth estimates to 45.7% (earlier 42%) for FY27E and 14.9% (earlier 20.9%) for FY28E. We estimate organic USD revenue growth of ~13% and ~12% for FY27E/FY28E, respectively. Management aspires to achieve EBIT margin of ~15.5% in FY27 by infusing AI and doubling-down on “Mod Squad” delivery model. We raise our EBIT margin estimates to 15.1%/15.3% for FY27E/FY28E, (vs 13.8%/14% earlier), post re-classification. With that our EPS estimates revised upward by ~6%/7% to ~7%/8% for FY27E/FY28E after factoring-in interest costs on the USD550mn, equity dilution from Cigniti minority issuance and Encora swap. We assign 28x to FY28E EPS that translates a TP of INR 2,020. Maintain our BUY rating.
