Coforge shares rally 7% on stock split, Q4 results, dividend; target prices

Shares of Coforge climbed 7 per cent in Tuesday's trade after the IT midcap company logged a strong set of results for the March quarter, driven by better-than-expected sequential revenue growth of 3.4 per cent in CC terms, robust order inflows totaling $2.1 billion, and an improvement in operating margins. The IT firm also provided a healthy outlook for FY26, with management indicating strong earnings visibility. This performance led several brokerage firms to project a 20 per cent revenue growth and margin expansion in FY26, prompting them to issue ‘Buy’ ratings on the stock.

Adding to the optimism on the counter were the announcements on stock split and dividend for FY25. 

Shares of Coforge climbed 6.66 per cent to hit a high of Rs 7,999.00 on BSE. 

Centrum Broking said the 12-month executable order book stood at $1.5 billion, up 47.7 per cent YoY with a high degree of repeat business. Headcount for Coforge grew by 403 employees sequentially to 33,497 and  attrition decreased 100 basis points QoQ to 10.9 per cent. Utilization was also up 70 basis points at 82 per cent.

"We maintain BUY with a revised target price of Rs 9,331 (vs Rs 10,540 earlier) at a PE of 35x on March 2027E EPS. We have decreased target PE multiple from 38x to 35x to account for near term uncertainties in the macro environment," Centrum broking said.

Choice Broking said while the near-term conditions may mildly impact key sectors, it has reduced its estimates only marginally -- by 1–3 per cent, and adopted a conservative view on margin expansion. 

"We maintain our rating to BUY with a downward revised target price of Rs 10,765, implying a PE multiple of 40x (maintained) based on FY27E EPS of 269.10," it said.

Coforge reported a quarter-on-quarter revenue growth of 3.4 per cent in constant currency (CC) terms, slightly above expectations of 3.2 per cent. This growth was primarily driven by strong performance in the BFSI and travel verticals.

Despite ongoing macroeconomic uncertainties, the company remains confident in its FY26 growth trajectory, supported by a robust order book, a healthy deal pipeline, and expected synergy benefits. For the quarter, EBIT margin improved by 123 basis points QoQ to 13.2 per cent. Management also indicated that ESOP-related costs are expected to decline further, targeting a reduction to 100 basis points of revenue starting from the second half of FY26.

"The company sees a clear line of sight for improving margins over the next two years. Deal momentum continued to accelerate, with fresh order intake reaching $2.1 billion—significantly higher than $501 million in Q3 and the eight-quarter average of $451 million. Its pipeline of large deals remains strong and unaffected, with closures anticipated in the near term," said Antique Stock Broking. The brokerage maintained its 'Buy' rating and kept its target price unchanged at Rs 9,650.

Motilal Oswal Financial Services (MOFSL) highlighted Coforge’s recent deal with Sabre as a strong signal that mid-tier IT firms now possess the scale and solution maturity to secure cost-efficiency-driven contracts.

"Among Tier-II players, our top pick is Coforge," MOFSL stated. "Its robust capabilities in the BFS vertical position it well to capitalise on a demand recovery, and its strong total contract value (TCV) points to a solid near-term growth outlook. We believe Coforge’s organic business fundamentals are strong, and the acquisition of Cigniti could serve as a valuable long-term asset."

MOFSL values the stock at 38 times FY27E earnings per share (EPS), assigning a target price of Rs 11,000—implying a potential upside of 47 per cent.

Foreign brokerage Nomura also named Coforge as its top pick among mid-cap Indian IT services companies, setting a target price of Rs 9,730 on the stock.

Coforge stock split record date 

Alongside its quarterly results, Coforge declared a fourth interim dividend of Rs 19 per share for FY25. The Board has set May 12 as the record date to determine shareholder eligibility for the dividend. The interim dividend will be paid within 30 days from the date of declaration.

In addition, the company has announced a stock split. Coforge has fixed Wednesday, June 4, as the record date for determining the entitlement of equity shareholders for the purpose of splitting its existing equity shares. Under this split, each equity share with a face value of Rs 10 will be subdivided into five equity shares with a face value of Rs 2 each, fully paid-up and ranking pari passu in all respects.