Analysts see up to 54% upside in Coforge; Nomura calls it top midcap IT bet

Coforge’s Investor Day has triggered a wave of optimism across brokerages, with analysts highlighting the company’s sharpened strategic priorities, disciplined execution and expanding deal pipeline as catalysts for a strong multi-year growth cycle. 

 

Four major brokerages, including Nomura, Emkay, Nuvama and Motilal Oswal, reiterated bullish views on the mid-tier IT services firm, with price targets implying meaningful upside and confidence in management’s ability to sustain momentum in a mixed global tech spending environment.

 

Nomura, which termed Coforge its “top pick in the mid-cap India IT services sector,” said the company is banking on a solution-led sales strategy to maintain its growth trajectory. In its report, the brokerage pointed to CEO Sudhir Singh’s detailed articulation of the company’s priorities. Singh said Coforge’s strategy rests on strengthening its execution capabilities and approaching clients with a solution-first mindset that directly addresses business challenges. He added that the company’s growth outlook is driven by four pillars, “big projects such as ServiceNow (in service lines) and ANZ (in geographies); structuring large deals proactively; scaling up key client accounts; and acquisition to get client access.”

 

Nomura said the management’s clarity around what it will not do is equally important. Singh noted that Coforge is “unlikely to add any new vertical or geography in the next 3-5 years” and will stay committed to existing markets and sectors where it has established depth. The company also does not intend to invest further in the data centre business, and he underscored that Coforge “will not have any one-offs in its P&L (from a reporting point of view); and will deliver over 70 per cent FCF/PAT.” Nomura said these disclosures should reassure investors concerned about past volatility in financial reporting.

 

The Japanese brokerage further highlighted Coforge’s ambition to replicate its industry-leading strength in the Travel vertical across BFS, Insurance, Healthcare and Public Services. In the US, the company plans to intensify efforts in Healthcare, especially in the provider and medtech segments, and in underpenetrated geographies such as the West and Midwest.

 

On the technology front, Coforge sees artificial intelligence (AI) as a net positive for revenue. Its ongoing investments in the Quasar and ForgeX platforms, Nomura said, are aimed at enabling clients to adopt AI at scale while preserving flexibility across technology stacks. Cloud, testing and engineering services continue to provide a strong base of demand. The company reiterated its target of reaching a $2 billion revenue run-rate by Q4FY26 with Ebit margins of about 14 per cent, which it intends to maintain as a floor from FY27 onward. Nomura maintained its ‘Buy’ rating and ₹2,000 target price.

 

Emkay analysts, who also attended the investor day meet, said Coforge’s high-level strategic narrative reflects a company preparing for accelerated, profitable growth. The brokerage noted the management’s emphasis on execution intensity, particularly in four areas, including strengthening AI-led engineering, data and ServiceNow capabilities; proactively structuring large contracts; deepening relationships in key accounts; and exploring semi-stressed assets for M&A where execution-led turnarounds are feasible. Emkay pointed out that Coforge closed 14 large deals in FY25 and targets 20 in FY26, with 10 already secured in the first half of the year.

 

The brokerage added that management expects CY26 IT budgets to be “better,” although spending remains elastic as clients adjust tech investments to evolving needs. Emkay also emphasised Coforge’s decision to stay within its five core verticals for the next 3-5 years and to maintain FCF/PAT at 70 per cent or higher. Incorporating the Cigniti merger, it raised EPS estimates by about 5 per cent and reiterated an ‘Add’ rating with a higher ₹2,000 target price.

 

Nuvama, meanwhile, said Coforge is poised to be “among the fastest growing IT services companies in FY26,” supported by strong deal wins and improved cash flow discipline. It highlighted management’s reaffirmation of hitting a $2 billion revenue run-rate by Q4FY26, sustaining FCF conversion at 70 per cent, and operating in an environment where the advantage is shifting toward “solution creators,” not “order takers.” The brokerage maintained its ‘Buy’ rating with a ₹2,250 target.

 

Motilal Oswal echoed these themes, saying Coforge’s growth strategy rests on big bets in AI-led engineering, data and ServiceNow; proactive large-deal pursuit; scaling existing Fortune 2000 accounts; and acquisitions focused on client access rather than capability buys. The brokerage said Coforge’s executable order book and resilient spending patterns across verticals strengthen confidence in its organic growth. It added that cross-selling opportunities post the Cigniti acquisition appear “highly synergistic.” Motilal Oswal valued Coforge at 38x FY28 EPS, assigning a target price of ₹3,000 – the most optimistic among peers – and implying up to 54 per cent upside.

 

Across brokerages, the takeaway is consistent: Coforge’s disciplined strategy, expanding market opportunity and sharpened focus on profitable execution position it as one of the most compelling mid-tier IT bets over the next several years.

 

Disclaimer: Target price and stock outlook has been suggested by Nuvama, Nomura, Emkay and Motilal Oswal. Views expressed are their own.