Hold Coforge: target of Rs 1760: ICICI Securities

ICICI Securities's research report on Coforge

Coforge reported strong revenue growth of 5.9% QoQ CC, led by ramp-up of Sabre mega deal and BFS deal conversions (five large deals signed in Q1FY26). Operating margin was robust with 251bps QoQ expansion on lower SG&A and employee costs. Order intake at USD 514mn was up 1.4% QoQ. 12-month executable orderbook of USD 1.63bn was up 27% YoY, led by robust new logo addition from AI-led traction. Cigniti also performed well with 3.9% QoQ USD growth and 80bps margin expansion. We maintain HOLD with largely unchanged FY27-28 earnings. We lower FY26E EPS factoring in wage hike and one-off expenses in Q3FY26. We have factored in 28% FY26E revenue growth and FY25-28E revenue / EPS CAGR at 17%/34%, led by steady margin expansion.

Outlook

We raise the TP to INR 1,760 (vs. INR 1,710 earlier) led by consistent performance on deliverables, revenue and margin outperformance on an unchanged one-year forward P/E of 32x.