Stocks to buy today, Aug 26: Analyst bets on Coforge, M&M; here's why

Shrikant Chouhan, head of equity research at Kotak Securities, is bullish on Coforge and M&M. Check target price, support and resistance levels here

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Stock Recommendations:

Coforge (COFORGE) – BUY   

Current market price (CMP): ₹1,764

Target Price: ₹2000

Support: 1730/1660

Resistance: 1830/1900

 

Coforge is a global digital services and solutions provider that leverages emerging technologies and deep domain expertise to deliver real-world business impact for its clients. A focus on select industries, a deep domain understanding of the underlying processes of those industries and partnerships with leading technology platforms enable Coforge to be a trusted partner of its clients in their transformation initiatives. Coforge leads with its Product Engineering approach and leverages AI, Cloud, Data, Integration and Automation technologies to transform businesses into intelligent, high-growth enterprises. Coforge has 30 global delivery centres and is present in 23 countries.

 

We believe Coforge will exit FY2026, with a revenue run-rate of US$2 billion and on a TTM basis by the June 2026 quarter. This is impressive against the backdrop of the industry slowdown, where peers are struggling.

 

On an absolute basis, Coforge will add US$452 million to revenues and US$354 million on an organic basis. Absolute revenue addition will be more than the companies in the Big 5, impressive in our view. This growth will be augmented with margin expansion - we forecast 13.5 per cent in FY2026, an expansion of 90 basis points (bps).  ALSO READ | Motilal Oswal sector of the week: Automotive ER&D; check top stock to buy

Key Growth drivers for Coforge are:

Strong execution: Coforge has created execution-centric measurement metrics that are typical but highly effective. For example, the company uses every week's count of proactive large deal proposals submitted as a measure of sales effectiveness. In addition, Coforge restricts the number of big bets (can be geo-expansion, capability build or a new partnership scale-up play) pursued and makes sure that the bet is always delivered on.

 

Hyper-personalisation in a few selective industries: Coforge follows a domain-first approach to technology. Deep domain expertise helps deliver on real-world deployments on AI, since industry expertise is a critical success factor in the AI era.

 

Deep engineering capabilities and assets: The company has strong engineering capabilities and software assets to help in service delivery. 

 

We forecast EPS growth of 41.3 per cent in FY26E and 30 per cent in FY27E. We value the stock at 35x June 2027E EPS and arrive at a Fair Value of ₹2,000. Retain BUY.

Mahindra & Mahindra – BUY

CMP: ₹3,400

Target Price: ₹3,800

Support: 3350/3200

Resistance: 3500/3650

 

We expect M&M stock to continue to outperform industry growth across tractor and automotive segments, including domestic PV and CV segments, given successful newer launches and strong brand equity. The tractor segment is expected to continue on its uptrend, driven by higher reservoir levels and expectations of a normal monsoon. The company expects the demand trends in FY26E to remain strong with a high single-digit year-on-year (Y-o-Y) volume growth. M&M’s tractor segment market share was 45.2 per cent in Q1FY26. The company remains a market leader in terms of revenue in the SUV segment, accounting for 27.3 per cent of the industry in Q1FY26. We expect the company’s SUV volumes to grow by low-teens in FY2026E, led by strong demand for new launches and the existing product lineup. The company had planned 7 ICE SUVs, 5 BEVs, and 5 LCVs to be launched by FY30E. We remain constructive on M&M, as it continues to execute well by maintaining a leadership position in all three segments, an improvement in its return ratio and cash flow generation, as well as its preparedness for the EV transition.  (Shrikant Chouhan is the head of equity research at Kotak Securities. Views expressed are his own.)