Buy Coforge; target of Rs 4900: Sharekhan

Sharekhan is bullish on Coforge has recommended buy rating on the stock with a target price of Rs 4900 in its research report dated April 27, 2023.

Broker Research

April 29, 2023 / 08:05 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on Coforge

Coforge reported resilient Q4FY23 performance with beat in CC revenue growth at 4.7% q-o-q (versus estimate of 3.5%) led by broad-based growth across verticals, while EBITDA margin of 18.8% missed our estimate due to hedging losses offsetting currency tailwinds and an improvement in utilisation. PAT (adjusted for one-offs) was at Rs. 233 crore (up 2% q-o-q). Coforge achieved a $1-bn revenue milestone in FY23 and aims for $2-bn in the coming years. FY24 CC revenue guidance of 13-16% (management confident to achieve guidance and has surpassed its FY23 CC revenue growth guidance); expects to maintain margins at FY23 levels. Q4FY23 order intake was impressive at $301 million and total executable order book was up 20% y-o-y to $869 million. The management is focused on making investment in capabilities as well as sales & marketing with a target to achieve higher value deal wins.

Outlook

We maintain a Buy on Coforge with an unchanged PT of Rs4900 as consistent deal wins and healthy order intake provides good revenue visibility and thus makes valuation of 21x FY25E EPS reasonable versus mid-tier IT companies.

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