Coforge Shares Stage 9% Intraday Rebound as Brokerages Upgrade Targets on Record Deal Intake

Shares of mid-tier information technology services provider Coforge staged an intraday recovery on Monday, rebounding nearly 9% from the day's low to trade over 3% in positive territory. The sharp turnaround came after early morning selling pressure saw the stock drop nearly 3% to Rs 1,844 on the National Stock Exchange (NSE), triggered by headline revenue slightly trailing street estimates. However, aggressive institutional buying emerged as major brokerages reiterated bullish outlooks, underpinned by record quarterly contract bookings and an upgraded margin guidance.

Key Earnings Highlights for the Quarter

The company's performance for the September quarter showed significant expansion across profitability metrics:

• Net Profit: Consolidated net profit surged 56.5% year-on-year (and 13.4% sequentially) to Rs 588.1 crore.
• Revenue: Consolidated revenue increased 53.6% year-on-year and 11.6% quarter-on-quarter to Rs 6,170.8 crore.
• Operating Margins: EBITDA surged 67% year-on-year to Rs 1,269.7 crore, with EBITDA margins expanding 168 basis points to 20.6%. EBIT stood at Rs 984.5 crore with margins at 15.95%.
• Margin Guidance: Coforge raised its FY27 EBIT margin guidance to 16%, up from the previous forecast of 15.5%.
• Deal Wins: The company closed eight large deals with a combined Total Contract Value (TCV) of $1.04 billion—marking its highest-ever quarterly intake.
• Order Book: The executable order book for the next 12 months rose 45% to $2.38 billion.

While constant-currency revenue growth clocked 10.1%—moderating below certain market expectations of 13%—organic constant-currency growth held steady at 3.8%.

Brokerage Views and Target Price Revisions

Leading domestic and global research houses largely shrugged off the slight revenue miss, placing greater emphasis on deal execution, cash flow conversion, and margin resilience.

Brokerage Recommendations:

• Jefferies: Maintained a 'Buy' rating and raised its target price to Rs 2,230 from Rs 2,040. Retaining Coforge as its top pick in the IT services sector, the brokerage cited steady organic delivery and lifted FY27–FY28 earnings per share (EPS) estimates by 3% to 5%.
• Nomura: Retained a 'Buy' rating and raised its target price to Rs 2,300 from Rs 2,130, implying an upside of more than 20%. Nomura lifted EPS forecasts by 5% to 7% on higher operating margin assumptions.
• Kotak Securities: Kept a 'Buy' rating and raised its fair value to Rs 2,300 from Rs 2,000. Analysts at the firm noted that record TCV bookings provide immense comfort regarding medium-term growth visibility and offset the top-line miss.
• Citi: Stood out as a cautious voice, keeping a 'Sell' rating while raising its price target to Rs 1,750 from Rs 1,670, pointing out muted organic growth trends across the sector and executable order conversion.

Impact on Indian Markets and Investors

The intraday swing in Coforge comes at a time when the Nifty IT index has seen heightened volatility amid macroeconomic uncertainties in key Western markets. Coforge has outperformed the sectoral index in recent months, bolstered by strategic acquisitions and expanding digital transformation pipelines.

For retail and institutional investors tracking Dalal Street's technology counters, Coforge's resilience indicates that select mid-cap IT firms with high execution efficiency, expanding margins, and robust order pipelines continue to command premium valuations and swift dip-buying interest.