Coforge shares: 4 reasons why this IT stock is Axis Securities' top pick of the week
Axis Securities has spotlighted Coforge for its robust niche market presence, strategic acquisitions, and positive growth outlook, highlighting expected revenue gains from recent deal wins.
- Aug 11, 2025,
- Updated Aug 11, 2025 11:49 AM IST
Coforge, a global IT services provider, has been identified by Axis Securities as its top stock pick for the week. The domestic brokerage emphasised Coforge's strategic acquisitions as pivotal in enhancing its operational capabilities. Strong presence in niche segment, imporvement in operational capabilities on key acquisitions, strategic capex and deal wins; and reasonable valuations are a few reasons why Axis Securities recommended Coforge.
It cited the strategic merger with Cigniti Technologies, which enhanced Coforge's IT delivery by integrating advanced QA/testing capabilities. This move positions Coforge as a comprehensive digital transformation provider and is projected to drive a long-term revenue growth of 10–12 per cent, the brokerage said.
Coforge's revenue visibility is reinforced by its strategic capital expenditures and recent deal wins. In Q1FY26, the company reported a capital expenditure of $65 million, which includes significant allocations to AI data centre projects. Additionally, Coforge secured five large deals during this period, with an executable order book for the next 12 months at $1.55 billion, marking a 47% year-on-year increase and showcasing a robust growth trajectory.
Axis Securities said the company's management is focused on closing at least 20 large deals in FY26, setting new performance benchmarks. Such initiatives contribute to Coforge's optimistic growth outlook, it said. Coforge's numerous long-term contracts with leading global brands further strengthen its position for sustained growth in the evolving industry landscape, Axis Securities said.
The valuation of Coforge remains attractive, with Axis Securities assigning a 31x P/E multiple to its FY27 estimated earnings. The target price is set at Rs 1,770 per share, indicating a potential 10% upside from the current market price. This valuation reflects confidence in Coforge's ability to leverage its strategic initiatives for future growth.
In a competitive environment, Coforge distinguishes itself by leveraging strategic acquisitions and a strong niche market presence. It competes with companies like TCS, Infosys, and Wipro, focusing on digital transformation and operational efficiency, thereby enhancing its market positioning and growth potential.
Coforge's strategic focus on broadening its service offerings and geographic reach aligns with industry trends, providing a competitive advantage. Combined with robust financials and strategic investments, this positions Coforge favourably in the market, promising potential growth in the coming years.
Axis Securities' endorsement of Coforge as a top pick is based on the company's strong fundamentals, strategic initiatives, and promising outlook. As Coforge continues to secure new deals and expand its capabilities, it is well-positioned for continued growth in the competitive IT services sector, Axis Securities suggested.
Coforge, a global IT services provider, has been identified by Axis Securities as its top stock pick for the week. The domestic brokerage emphasised Coforge's strategic acquisitions as pivotal in enhancing its operational capabilities. Strong presence in niche segment, imporvement in operational capabilities on key acquisitions, strategic capex and deal wins; and reasonable valuations are a few reasons why Axis Securities recommended Coforge.
It cited the strategic merger with Cigniti Technologies, which enhanced Coforge's IT delivery by integrating advanced QA/testing capabilities. This move positions Coforge as a comprehensive digital transformation provider and is projected to drive a long-term revenue growth of 10–12 per cent, the brokerage said.
Coforge's revenue visibility is reinforced by its strategic capital expenditures and recent deal wins. In Q1FY26, the company reported a capital expenditure of $65 million, which includes significant allocations to AI data centre projects. Additionally, Coforge secured five large deals during this period, with an executable order book for the next 12 months at $1.55 billion, marking a 47% year-on-year increase and showcasing a robust growth trajectory.
Axis Securities said the company's management is focused on closing at least 20 large deals in FY26, setting new performance benchmarks. Such initiatives contribute to Coforge's optimistic growth outlook, it said. Coforge's numerous long-term contracts with leading global brands further strengthen its position for sustained growth in the evolving industry landscape, Axis Securities said.
The valuation of Coforge remains attractive, with Axis Securities assigning a 31x P/E multiple to its FY27 estimated earnings. The target price is set at Rs 1,770 per share, indicating a potential 10% upside from the current market price. This valuation reflects confidence in Coforge's ability to leverage its strategic initiatives for future growth.
In a competitive environment, Coforge distinguishes itself by leveraging strategic acquisitions and a strong niche market presence. It competes with companies like TCS, Infosys, and Wipro, focusing on digital transformation and operational efficiency, thereby enhancing its market positioning and growth potential.
Coforge's strategic focus on broadening its service offerings and geographic reach aligns with industry trends, providing a competitive advantage. Combined with robust financials and strategic investments, this positions Coforge favourably in the market, promising potential growth in the coming years.
Axis Securities' endorsement of Coforge as a top pick is based on the company's strong fundamentals, strategic initiatives, and promising outlook. As Coforge continues to secure new deals and expand its capabilities, it is well-positioned for continued growth in the competitive IT services sector, Axis Securities suggested.