Coforge Investor Day 2025: 5 key takeaways, guidance & share price targets

At its Investor Day, Coforge said it expects to achieve $2 billion revenue run-rate by Q4FY26. The IT firm sees no more one-offs with free cash flow (FCF) conversion at 70 per cent. Coforge believes the prevailing market is great for ‘solution creators’, not so for ‘order takers’. It expects Cigniti acquisition to be completed in a few weeks. The midcap IT firm is banking on Gen AI-led transformation to drive growth.

Nomura Indai maintained its 'Buy' rating on Coforge with an unchanged target price of Rs 2,000. Coforge is its top pick in the mid-cap India IT services sector.

"We believe Coforge’s strong executable order book and resilient client spending across verticals bode well for its organic business. Cross-selling opportunities in Cigniti remain highly synergistic for the company. We continue to view Coforge as a structurally strong mid-tier player well-placed to benefit from vendor consolidation/cost-takeout deals and digital transformation. We value Coforge at 38 times FY28E EPS with a targe price of Rs 3,000, implying a 54 per cent potential upside. Reiterate Buy," MOFSL said.

"Coforge has delivered strong results consistently and pacified earlier concerns around margins and cash flows. We reckon Coforge shall be among the fastest growing IT services companies in FY26 (on strong deal-wins and a robust order book) and over the next three years (strong capabilities and aggressive management)," Nuvama Institutional Equities said. 

This brokerage maintained 'Buy’ on the stock with an unchanged target price of Rs 2,250, based on 38 times estimated FY27 and FY28 average earnings. 

Key takeaways from Investor Day
Demand environment: Nuvama said the Coforge management highlighted that IT spending is not shrinking, but is being reinvented. The IT firm believes clients are open to spending on tech transformation programs led by new technology while it is a difficult market for RFP driven companies that are primarily ‘order takers’.

Gen AI-led transformation: Coforge, Nuvama said, is fundamentally changing the delivery of its technology and BPO services by embedding AI early on, leveraging its proprietary platforms—‘CodeInsightAI’ for enhanced software reverse engineering, ‘BlueSwan’ for integrated automation and orchestration and ‘Forge-X’ for rapid transformation. These platforms are infusing Gen AI and intelligent automation into its delivery model, it said.

Strategic bets: Coforge is aiming to grow faster than peers in AI-led Engineering, data and ServiceNow capabilities. It is looking to deliver above-sector growth in North America West & Midwest and ANZ within geo. Healthcare business is seen on track to reach $100 million and UK public sector to reach $200 million in sales.

Deal-wins: Coforge closed ten large deals in H1FY26 against five in H1FY25. Given the rise in deal size and velocity of deals, it is on track to close 20 large deals in FY26. Every large deal Coforge closes is proactive rather than waiting for RFP. Coforge does not engage with consultants as the model is not RFP driven, Nuvama said.

Acquisition: Coforge said it will continue to focus on acquisitions primarily to gain client access. Its management prefers to acquire IT firms for client access rather than capability while ensuring its acquisitions are EPS accretive from first year of integration. It is confident of being able to turn around distressed or semi-distresses companies, thereby unlocking value. Earlier acquisitions, Coforge believes, are proof of success of this strategy with SLK’s revenue doubling post-acquisition despite continued challenges in one of its key segments—the mortgage business.

Guidance: The Coforge's management expects to achieve $2 billion in  revenue run-rate by Q4FY26. EBIT margin is seen staying above 14 per cent, going forward, irrespective of ESOP or any other expenses.