Buy Coforge; target of Rs 4680: Sharekhan

Sharekhan's research report on Coforge

Our interaction with Coforge’s management indicated that demand stays strong even amid geopolitical tensions. Further, it noted that its clients have negligible exposure to Russia and Ukraine and its European exposure is largely limited to the UK. We expect the company’s travel vertical to recover strongly in FY2023E, while growth in BFS space is set to outpace other verticals. Strong order intake, recovery in travel vertical, robust execution and investments in building capabilities will drive growth. With a higher-than-usual wage revision effective April 2022, margins are expected to stay stressed q-o-q in Q1FY2023, but improve y-o-y. Management remains confident in improving gross margin in FY2023 given higher offshore revenue.

Outlook

We maintain a Buy on Coforge with a revised PT of Rs. 4,680, given strong earnings visibility, robust executable order booking and stable margin outlook.

More Info

At 10:39 hrs COFORGE LIMITED was quoting at Rs 3,753.00, up Rs 106.50, or 2.92 percent.

It has touched an intraday high of Rs 3,812.20 and an intraday low of Rs 3,690.00.

It was trading with volumes of 4,910 shares, compared to its thirty day average of 13,562 shares, a decrease of -63.80 percent.

In the previous trading session, the share closed down 0.98 percent or Rs 36.25 at Rs 3,646.50.

The share touched its 52-week high Rs 6,133.00 and 52-week low Rs 3,224.45 on 04 January, 2022 and 15 June, 2022, respectively.

Currently, it is trading 38.81 percent below its 52-week high and 16.39 percent above its 52-week low.

Market capitalisation stands at Rs 22,863.79 crore.

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