Coforge slips 3% even as Jefferies, Nomura, others raise targets after Q2 earnings. Why are they bullish?

ETMarkets.com

Coforge shares fell despite strong Q2 results and brokerages raising target prices.

Coforge shares dropped to Rs 1,844 apiece on Monday morning. This comes after the company on Friday announced that its revenue jumped nearly 54% YoY to Rs 6,170.8 crore during the quarter under review. EBITDA meanwhile surged more than 67% YoY to Rs 1,269.7 crore while EBITDA margin soared by 168 basis points to 20.6% during the September quarter.

The IT services firm raised its FY27 EBIT margin guidance to 16%, and said the next 12 months signed order book stood at $2.38 billion, up 45% YoY. The company signed eight large deals during Q2, the highest number signed by the company in a single quarter.

Also read | Coforge Q2 net profit jumps 56.5% to Rs 588 crore on Encora deal

Jefferies on Coforge share price

Jefferies maintained its ‘Buy’ rating on the shares of Coforge but raised its target price to Rs 2,230 apiece from Rs 2,040 apiece. The latest target price implies more than 17% upside potential from the stock’s previous closing price of Rs 1,900.50 apiece on NSE.

The international brokerage noted that the company’s September quarter revenues missed expectations, while margins beat estimates. A 7% QoQ growth in the executable order book, strong deal pipeline, and significantly improved margin outlook position Coforge well to deliver 14% and 26% CAGRs in organic constant currency revenues and EPS, respectively, it added.

Strong earnings delivery can sustain stock outperformance even after its 56% rally over the past six months, Jefferies said, maintaining Coforge as the top pick in the IT sector.

Nomura on Coforge share price

Nomura also maintained its ‘Buy’ rating on the shares of Coforge, while increasing its target price to Rs 2,300 apiece from Rs 2,130 apiece. This implies an upside potential of 21% from the stock’s previous closing price.

The international brokerage raised FY27-28 EPS BY 5-7%, factoring in Q2 earnings and higher margin assumptions. It, like Jefferies, named Coforge its top pick in the mid-cap space of the India IT services sector.

Motilal Oswal on Coforge share price

Motilal Oswal Financial Services also maintained its ‘Buy’ rating on the shares of Coforge and raised target price to Rs 2,370 apiece, implying nearly 25% upside potential. It said the company’s strong order book supports growth acceleration in the second half of FY27.

“We expect Coforge to be the growth leader within our coverage universe, and we reiterate it as our top pick. Strong deal wins, continued execution, improving cash conversion, and EBIT margin guidance upgrade, along with further expansion in FY28, provide confidence in the medium-term growth outlook,” the domestic brokerage said.

Also read | Double-digit growth seen on corporate scoreboard in Q2, but bank, IT, pharma lag

Coforge share price

Coforge shares have fallen a little over 1% in the past one week but gained more than 6.5% in one month and 15% in 2026 so far, even as the Nifty IT index crashed more than 16% at the same time.

The shares of the company have gained 8% in one year. In the longer term, the stock has delivered nearly multibagger returns of 94% in three years and 87% in five years. The company has a market capitalisation of over Rs 64,060 crore.