Coforge zooms 10% on solid Q4 show; analysts see up to 47% upside

Shares of Coforge were in high demand during early trade on Wednesday, May 6, after the IT firm reported a multifold surge in consolidated net profit for the fourth quarter of 2025–26 (Q4FY26).  Following the announcement, Coforge share price climbed as much as 10 per cent to hit the upper circuit of ₹1,285.60 per share during the morning deals on the NSE. Trading resumed after the exchange revised the upper circuit to ₹1,344 apiece.  The counter continues to see solid buying interest from investors. At 09:48 AM, Coforge shares were trading at ₹1,268 apiece, up 8.49 per cent from its previous close of ₹1,168.80 per share on the NSE. Meanwhile, the benchmark Nifty 50 was trading with gains of 109 points, or 0.45 per cent, at 24,141 levels. 

 

 

Sentiments were further buoyed by bullish commentary from brokerages. Elara Capital has upgraded its rating to ‘Accumulate’ from ‘Reduce’, while Choice Institutional Equities has reaffirmed its ‘Buy’ rating following the Q4 results.

 

During Q4FY26, the IT firm’s consolidated net profit (attributable to owners of the company) stood at ₹612.3 crore, reflecting a multifold jump from ₹261.2 crore in the corresponding quarter of the previous fiscal year.

 

The company’s revenue from operations during the quarter under review grew 30 per cent year-on-year (YoY) to ₹4,450.4 crore from ₹3,422.2 crore a year ago. On the flipside, the company’s total expenses during Q4FY26 also rose 24 per cent YoY to ₹3,794 crore from ₹3,060 crore reported in Q4FY25.

Meanwhile, here’s what brokerages said on Coforge Stock:

Elara Capital: Accumulate | Target price ₹1,380

Brokerage firm Elara Capital has upgraded its rating to ‘Accumulate’ from ‘Reduce’, with a target price of ₹1,380 based on 21x (unchanged) FY28E P/E. It cited stronger Q4 growth in healthcare, travel and emerging verticals, while BFSI revenue growth was relatively muted due to a client-specific issue. The assigned target price implies an upside potential of 7.34 per cent from the current market price. 

The executable order book remains strong and, even if a conservative book-to-bill multiple is applied, mid-teen growth is a possibility in FY27, in the brokerage’s view. Elara has factored in a USD 40–50 million annual loss due to the exit of a low-margin India business. 

“Accordingly, we build in 14 per cent USD revenue growth during FY26–28E. Due to operating leverage and exit of low-margin business in India, margins and profitability are likely to improve. We expect a 17 per cent earnings CAGR during the same period. Consequently, we raise our earnings estimates by 9–10 per cent during FY27–28E,” said the brokerage in its report. 

Notably, Coforge shares have seen a 30 per cent correction in the past three months, which Elara said was possibly due to the ongoing acquisition of a relatively low organic revenue growth company. The brokerage has not factored its financials into its estimates.  READ | Brokerages bullish on M&M on SUV growth, product pipeline; flag margin risk

Choice Institutional Equities: Buy | Target price ₹1,900

Analysts at Choice Institutional Equities have retained their ‘Buy’ rating on Coforge stock, with a target price of ₹1,900 based on FY28E EPS of ₹67.8. The assigned target price implies an upside potential of 47.79 per cent from the current market price.

 

According to Dhanshree Jadhav and Shreya Mehra of Choice, Coforge’s Q4FY26 performance reinforces confidence in its growth and margin trajectory, supported by strong deal momentum, robust client mining and a healthy executable order book.

 

Margin expansion to 16.6 per cent, analysts said, highlights effective cost control and early benefits from AI-led efficiency. “While the exit from low-margin businesses may keep near-term growth (Q1FY27) subdued, it reflects a strategic pivot towards higher-quality, margin-accretive growth. Continued traction in large deals, Encora-led synergies and scaling up AI capabilities provide strong visibility for FY27E, with improving profitability and cash conversion further strengthening the investment case,” wrote the analysts in a research note.

 

The shift towards outcome-based delivery through Agentic AI and “Mod Squads,” alongside strong internal AI adoption, analysts believe, has evolved it into a high-quality, margin-accretive growth story, potentially outperforming peers. They expect revenue/EBIT/PAT to grow at a CAGR of 21.2 per cent/25.7 per cent/29.9 per cent over FY26–FY29E.  ===================================================== 

(Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.)