Morgan Stanley has maintained an ‘overweight’ rating on Coforge, with a target price of ₹11,500, implying a 51.5% upside from the current market price (CMP) of ₹7,590.00. Separately, IIFL Finance has given a ‘buy’ rating with a target price of ₹10,500, expecting a 38.3% upside.
Key drivers for the bullish outlook:
- Stock split approved in a 1:5 ratio by the Board of Directors.
- Acquisition of 100% stake in Rhythmos & TMLabs – a departure from Coforge’s usual phased acquisition approach. Morgan Stanley noted that the price paid does not seem inexpensive, with potential dilution of up to 1% to PBT.
- 13-year, $1.56 billion total contract value (TCV) deal win from Sabre, the largest-ever deal for a mid-cap IT firm. IIFL estimates this could contribute $100 million (7%) to annual revenues.
- Strengthened expertise in the airline industry through Rhythmos acquisition, bringing capabilities in cloud, AI/ML, and big data.
- TMLabs acquisition enhances ServiceNow implementation capabilities, especially in Australia and healthcare.
- IIFL projects Coforge to deliver sector-leading 21.4% CC organic revenue growth in FY25, with 23% revenue CAGR and 39% EPS CAGR for FY25-27.
With these strategic expansions, acquisitions, and deal wins, analysts expect strong earnings growth and an upside potential in Coforge’s stock.
Disclaimer:
The information provided in this article is for informational purposes only and does not constitute financial or investment advice. Stock market investments are subject to risks, and past performance is not indicative of future results. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions. Business Upturn and its affiliates do not guarantee the accuracy, reliability, or completeness of the market data provided.
