Coforge (COFORGE IN) – Company Initiation – Bigger bites, powering the next growth phase – BUY
Published on 06 Jan 2026
We initiate coverage on COFORGE with ‘BUY’ rating and TP of Rs 2,140 valuing at 32x FY28E earnings, with potential upside of ~32%. COFORGE has positioned itself in the leader’s quadrant, backed by a strategic moat built on deep domain expertise across verticals. COFORGE posted ~14% organic CAGR over FY20-25, driven by strong traction in BFSI, TTH (together accounted for ~50% of revenue), and Healthcare. Its executable order book of ~USD1.6bn provides revenue visibility of ~80%. The 10 large deal wins in H1FY26, vs. 14 wins in full year FY25, reinforce our confidence in sustained mid-teens organic growth. Number of clients at the mid and top end of the pyramid has grown at >20% CAGR over the last 5 years, reflecting deep client mining and scaling initiatives. Strengthening client pyramid is also an outcome of aggressive acquisition strategy (SLK & Cigniti), and most recently Encora would help with onboarding potential and scalable accounts. Operating margin is likely to be ~14% in the medium term due to higher amortization and limited growth within Encora before it achieves full synergy benefits.
