Coforge shares set for a 51% upside, says Nuvama; cites these factors 

Shares of IT major Coforge are set for a 51% upside, according to the brokerage Nuvama Institutional Equities. The IT major Coforge's story is led by industry leading growth and renewed focus on margins and cash flows. The brokerage also expects the company making big strides in developing AI-driven solutions, which should help it in the current cycle. "Retain ‘BUY’ with a TP of Rs 2,200 valuing at 32 times FY28E PE (currently trades at 21x FY28 PE)," said Nuvama. 

The stock trades at Rs 1460 in the current session. Market cap of the firm stood at Rs 62,822 crore. The stock has gained 36% in three months. The rally in the IT stock was boosted by strong Q4 earnings. 

Q4 earnings came above estimates with net profit jumping 145 percent year-on-year to Rs 612 crore. Revenue climbed 30 percent to Rs 4,450 crore, while EBITDA margin expanded to 16.6 percent, against 14.6 percent estimated by the Street.

Market sentiment is upbeat post investor day guidance of achieving a $5 billion revenue target by FY2030 and a broader industry shift toward AI-driven delivery to boost profit margins.

"We attended Coforge’s investor day. Key takeaways: i) Targets $5bn revenue by FY30 (including $700mn inorganic), implying 15%/20% organic/consolidated CAGR over FY26–30E. ii) Order book at $1.75bn (2.4x FY22) with healthcare and public sector to drive FY27 large deal momentum. iii) 75%+ of AI pilots scaled into production via ‘ModSquad’ human agent hybrid model," said Coforge. 

The IT firm's management reiterated they are aspiring for $2.6bn plus revenue and $400mn plus EBIT by FY27. For FY30, the company is targeting $5 bn revenue and $800 mn plus EBIT (including acquisitions)—~15% organic CAGR and ~20% overall CAGR over FY26–30E. Margin expansion is structural, driven by AI-led cost efficiencies and a deliberate exit from low-margin businesses.