Hold Coforge: target of Rs 7,570: ICICI Securities

ICICI Securities research report on Coforge

Coforge continued to report a strong top-line performance in Q4FY25. Management acknowledged the challenging demand environment but reiterated its goal to reach USD 2bn by FY27 on the back of record-high deal wins in FY25, strong deal pipeline and its ability to proactively shape large deals. Management expects growth to be broad-based. We model 21%/12.3% YoY USD revenue growth in FY26E/FY27E, assuming USD 2bn revenue run-rate by Q4FY27.

Outlook

This includes strong organic growth of ~17% USD in FY26 (better than 15% in FY25) led by ~6% contribution from ramp-up of the mega-deal win from Sabre. We continue to value Coforge at 32x on FY27E EPS (roll-forward by one quarter) of INR 237 to arrive at a TP of INR 7,570. We like Coforge for its consistent strong revenue growth trajectory, but assign a HOLD rating given premium valuations against the backdrop of the weak demand environment.