Coforge stock: Nuvama sees 88% upside, TP ₹2,200

What changed for Coforge after the latest results

Coforge has moved back into focus after a strong set of Q4 earnings and a series of bullish brokerage notes that point to substantial upside from recent levels. Nuvama Institutional Equities reiterated its ‘Buy’ view and raised its target price to ₹2,200 from ₹2,100, positioning Coforge as a growth-led IT services name with a renewed push on profitability, cash flows, and AI-led delivery. Motilal Oswal also reiterated a ‘buy’ rating, with a target price of ₹1,800 and an upside potential of up to 54%.

The immediate trigger for the rally was Q4 performance that came in above Street estimates, alongside upbeat commentary following investor day targets. In addition to the quarter’s numbers, the company has outlined a long-range goal of reaching $1 billion revenue by FY2030, supported by both organic growth and acquisitions.

Nuvama’s ‘Buy’ call and what it is pricing in

Nuvama’s latest note retains ‘BUY’ with a target price of ₹2,200, valuing the stock at 32 times FY27E PE. The brokerage flagged that the stock currently trades at around 20 times FY27 PE, and described Coforge as its top pick in the sector due to its mix of growth execution and a sharper focus on margins and cash generation.

In a separate note, Nuvama also framed the broader Indian IT correction as an opportunity and argued that Generative AI does not pose an existential threat to the sector. Within that context, Coforge was highlighted as a top pick, with the brokerage noting that the current market price implied a very low terminal growth assumption.

Nuvama also indicated it revised FY27E and FY28E EPS estimates upward by 7.5% and 8.0%, respectively, as it integrates Encora and Cigniti, upgrades margins, and changes its USD-INR assumption to 93 from 88.

Q4 earnings: profit surge, revenue growth, and margin beat

Coforge’s Q4 print was a key factor behind improved sentiment. Net profit rose 145% year-on-year to ₹612 crore. Revenue increased 30% to ₹4,450 crore (also reported as ₹4,450.4 crore in the coverage). EBITDA margin expanded to 16.6%, compared with 14.6% estimated by the Street.

The combination of higher growth and a margin beat mattered because broker notes repeatedly pointed to Coforge’s margin and cash-flow priorities as the next leg of the story. Nuvama’s thesis emphasised that the company is chasing higher profitability and stronger cash flows alongside growth.

Investor day targets: $1 billion revenue by FY2030

Post the investor day, management guidance helped shape the market’s view of Coforge’s medium-term runway. The company is targeting $1 billion revenue by FY30, including $1.7 billion inorganic contribution. The stated trajectory implies about 15% organic CAGR and about 20% consolidated CAGR over FY26 to FY30E.

For FY30, the company also targets $1.8 billion plus EBIT (including acquisitions). Management has linked margin expansion to structural drivers, including AI-led cost efficiencies and a deliberate exit from low-margin businesses.

Order book and large deal momentum

Coforge disclosed an order book of $1.75 billion, described as 2.4 times FY22. The company indicated that healthcare and the public sector are expected to drive FY27 large deal momentum.

Nuvama has repeatedly cited the order intake and pipeline visibility as supportive of execution in upcoming quarters. In a separate update tied to Q3FY26 results, Nuvama highlighted a 12-month executable order book of $1.7 billion and noted that it was supported by six large deal wins across BFS, travel, insurance, and healthcare.

AI delivery: ‘ModSquad’ and scaling pilots

Coforge has also described progress in moving from pilots to scaled AI deployments. The company said 75%+ of AI pilots have been scaled into production through a ‘ModSquad’ human agent hybrid model.

Brokerage commentary linked this to the broader industry shift toward AI-driven delivery, which is increasingly seen as a lever for protecting or improving margins. Nuvama’s note on Coforge also stated that the company is making big strides in developing AI-driven solutions that should help it in the current cycle.

Valuation, multiples, and where broker targets stand

Nuvama’s note explicitly anchored its target price to a valuation multiple and highlighted the current trading multiple. It said its target price of ₹2,200 is based on 32 times FY27E PE, while the stock trades at about 20 times FY27 PE. The note also referred to attractive valuations versus peers such as Persistent.

The brokerage also quantified upside versus the prevailing market price at the time of its note, citing 88.36% from a CMP of ₹1,168.30 on the BSE.

Key numbers at a glance

Cash flows, pruning low-margin business, and guidance

A key part of the narrative across notes is that Coforge is trying to build a more cash-generative profile while sustaining growth. Nuvama said management is focusing on pruning low-margin businesses and improving cash flows, and it also noted that Coforge raised its FCF to PAT guidance to 100%+.

This focus matters because IT services valuations often hinge on the durability of operating margins and the quality of cash conversion. The broker view is that Coforge’s margin expansion is increasingly structural, supported by AI-led efficiency gains and business-mix decisions.

Why the story is resonating with brokerages

Brokerages maintained bullish calls after the Q4 results, with several estimates pointing to over 50% potential upside in their target frameworks. Nuvama’s thesis is built around “industry leading growth” with a renewed focus on margins and cash flows, while also seeing Coforge as a relative growth leader despite a weak IT demand backdrop.

Separately, market commentary has linked optimism in the IT pack to the idea that AI is shifting delivery models rather than shrinking the addressable market. Nuvama’s broader sector note stated that the Indian IT space faces no existential threat from Generative AI and that the total addressable market is set to increase, even if near-term volatility persists.

Conclusion

Coforge’s Q4 results, a stronger-than-expected margin outcome, and management’s FY30 targets have reshaped near-term sentiment around the stock. Nuvama’s ₹2,200 target and Motilal Oswal’s ₹1,800 target reflect a market view that growth, margin improvement, and cash-flow priorities are converging, supported by a $1.75 billion order book and scaling of AI pilots. The next key checkpoints for investors will be execution against the investor day roadmap, progress on margin and cash conversion, and updates on large deals in verticals such as healthcare and the public sector.