Coforge share price targets see upward revisions post all-round show in Q2
Nomura India said Coforge posted 5.9 per cent sequential constant currency (cc) revenue growth against its estimate of 6 per cent. The EBIT margin for the quarter came in at 14 per cent, up 260 basis points sequentially.
- Oct 27, 2025,
- Updated Oct 28, 2025 9:47 AM IST
Coforge has seen a modest upward revision in earnings estimates and target prices following its September quarter results, as the IT firm reported revenue in line with expectations but delivered a better-than-expected EBIT margin.
Nomura India said Coforge posted 5.9 per cent sequential constant currency (cc) revenue growth against its estimate of 6 per cent. The EBIT margin for the quarter came in at 14 per cent, up 260 basis points sequentially, with no one-off adjustments. Free cash flow stood at $36.5 million.
“A key pushback on the company was significant adjustments to EBIT margin (due to one-offs) and negative FCF (due to investments in the data center business). Both these issues were addressed in Q2, with EBIT margin improving and FCF turning positive. Salary increments will be rolled out in Q3 and will be largely offset, to some extent, by lower ESOP and depreciation costs,” Nomura said.
The brokerage raised its target price on Coforge to Rs 1,900 from Rs 1,880, calling the stock its top IT pick in the mid-cap space.
Nuvama Institutional Equities said that along with solid results, Coforge’s management has put to rest all concerns related to margins and cash flows, paving the way for a potential re-rating.
“We are raising FY26/27 EPS by 2.6 per cent and 4.6 per cent, building in higher margin and lower interest expense. This, along with a valuation rollover to 38 times, yields a target price of Rs 2,250 (earlier Rs 2,000); retain ‘BUY’,” Nuvama said.
Choice Institutional Equities said Coforge may continue to stay ahead of the curve by embedding AI early across its service offerings. The firm is also leveraging its proprietary IP and platforms—such as Code Insight AI, BlueSwan, and Forgex—to infuse GenAI and intelligent automation into delivery. Choice revised its target price to Rs 2,015 from Rs 1,930.
Coforge’s management has guided for margins to remain stable at around 14 per cent. However, Motilal Oswal Financial Services (MOFSL) cautioned that margins could come under pressure in the current demand environment.
“It is possible that management may fall short of its margin guidance. That said, we still expect a notable improvement year-on-year in FY26, with margins likely to land fairly close to the management’s target. We estimate the FY26 EBIT margin at 13.8 per cent,” MOFSL said.
Calling Coforge a growth leader within its coverage universe, MOFSL assigned a target price of Rs 2,400 on the stock.
Coforge has seen a modest upward revision in earnings estimates and target prices following its September quarter results, as the IT firm reported revenue in line with expectations but delivered a better-than-expected EBIT margin.
Nomura India said Coforge posted 5.9 per cent sequential constant currency (cc) revenue growth against its estimate of 6 per cent. The EBIT margin for the quarter came in at 14 per cent, up 260 basis points sequentially, with no one-off adjustments. Free cash flow stood at $36.5 million.
“A key pushback on the company was significant adjustments to EBIT margin (due to one-offs) and negative FCF (due to investments in the data center business). Both these issues were addressed in Q2, with EBIT margin improving and FCF turning positive. Salary increments will be rolled out in Q3 and will be largely offset, to some extent, by lower ESOP and depreciation costs,” Nomura said.
The brokerage raised its target price on Coforge to Rs 1,900 from Rs 1,880, calling the stock its top IT pick in the mid-cap space.
Nuvama Institutional Equities said that along with solid results, Coforge’s management has put to rest all concerns related to margins and cash flows, paving the way for a potential re-rating.
“We are raising FY26/27 EPS by 2.6 per cent and 4.6 per cent, building in higher margin and lower interest expense. This, along with a valuation rollover to 38 times, yields a target price of Rs 2,250 (earlier Rs 2,000); retain ‘BUY’,” Nuvama said.
Choice Institutional Equities said Coforge may continue to stay ahead of the curve by embedding AI early across its service offerings. The firm is also leveraging its proprietary IP and platforms—such as Code Insight AI, BlueSwan, and Forgex—to infuse GenAI and intelligent automation into delivery. Choice revised its target price to Rs 2,015 from Rs 1,930.
Coforge’s management has guided for margins to remain stable at around 14 per cent. However, Motilal Oswal Financial Services (MOFSL) cautioned that margins could come under pressure in the current demand environment.
“It is possible that management may fall short of its margin guidance. That said, we still expect a notable improvement year-on-year in FY26, with margins likely to land fairly close to the management’s target. We estimate the FY26 EBIT margin at 13.8 per cent,” MOFSL said.
Calling Coforge a growth leader within its coverage universe, MOFSL assigned a target price of Rs 2,400 on the stock.