Coforge stock: Motilal Oswal sees 54% upside in FY26

What changed for Coforge in broker notes

Motilal Oswal Financial Services (MOFSL) reiterated its BUY view on Coforge, framing the company as a likely growth leader among the stocks it tracks. In one note, the brokerage valued Coforge at 26x FY28E EPS and set a target price (TP) of Rs 1,800, indicating 54% potential upside. In a separate note, it valued the stock at 38x Jun’27E EPS with a TP of Rs 2,400, implying 36% potential upside. The brokerage also highlighted that it has kept estimates largely unchanged in the later view, while maintaining Coforge as its top pick in the mid-tier IT segment. Alongside these, market commentary also referenced a call with Coforge at “Buy | Target Rs 2,400 | LTP Rs 1,796 | Upside 33%”.

Motilal Oswal’s rationale: growth leadership and margin improvement

MOFSL said it expects Coforge to be the growth leader within its coverage universe. It increased estimates by 3-4% to factor in the exit of the India pass-through business, which it said has a 2-3% revenue impact. It also referenced a revenue restatement where hedge impact is excluded from EBIT, and built in a 100-150 basis point improvement in margin guidance. The brokerage’s thesis leans on a mix of improving margin profile, strong deal wins, and steady demand in AI-led managed services. It also described Coforge as a structurally strong mid-tier player.

Order visibility and quarterly performance metrics in focus

Coforge’s recent operational metrics cited in the brokerage commentary included 5.9% quarter-on-quarter constant-currency (CC) revenue growth and 18% quarter-on-quarter PAT growth. Order intake was stated at USD 514 million, and EBIT margin at 14%. A 12-month executable order book of USD 1,600 million was cited as providing near-term revenue visibility. The note also pointed to consistent quarterly deal wins of more than USD 500 million and cross-selling synergies linked to Cigniti.

Large-deal pipeline and FY26 organic growth outlook

Management commentary referenced in the note set an ambition of 20 large deals in FY26, with 10 already closed in 1HFY26. The same commentary linked robust deal pipeline and high order visibility to a 23% year-on-year organic growth outlook for FY26. MOFSL used these datapoints to support the view that Coforge can remain a relative outperformer within the IT universe it covers. It also positioned Coforge as a preferred bottom-up pick within mid-tier IT, alongside Hexaware, while favouring HCL Tech and Tech Mahindra among large caps.

Encora acquisition and the broader M&A view

Motilal Oswal noted that the Encora acquisition strengthens Coforge’s presence in the Hi-Tech and Healthcare verticals. In a separate market note, the brokerage said it views Coforge’s recent USD 2,500 million acquisition positively, citing new capabilities and market verticals it unlocks. It also flagged that the acquisition valuation is on the higher side versus previous deals, but said the strategic rationale is sound given the focus on an AI-native digital engineering firm. The primary risk highlighted was potential equity dilution during integration over the next year.

How other brokerages are positioning: Jefferies and Goldman Sachs

Jefferies was cited as downgrading several large Indian IT stocks, including Infosys and TCS, pointing to AI-related disruptions and greater downside risks. It said it prefers mid-sized IT firms as they can pivot faster to new opportunities, and named Coforge, Sagility, and IKS (Inventurus Knowledge Solutions) as top picks with projected returns of 19-26%. Separately, Goldman Sachs was cited as staying bullish on Bharat Electronics due to expectations of a strong defence order pipeline and improving earnings visibility. Market coverage also noted broker positivity across defence, IT, and FMCG, with Marico mentioned alongside Coforge in Motilal Oswal’s maintained BUY views.

IT sector backdrop: bottoming out and AI services cycle

Motilal Oswal’s sector view, as cited, is that the Indian IT sector has bottomed out and could see a recovery driven by AI services by 2026. It also framed the demand shift as moving from AI pilot projects to full-scale implementation. Another Motilal Oswal note said growth recovery is expected to become visible from the second half of FY2027 and to fully materialise in FY2028 as enterprises embark on full-scale AI deployments. In near-term context, MOFSL expected the September quarter (Q2FY26) to be muted for the sector with limited improvement over the prior quarter, reinforcing its preference for stock-specific selection.

Key numbers at a glance

Market impact and what investors typically track next

For investors, the immediate relevance of such brokerage notes is the linkage between Coforge’s stated order visibility and the confidence around organic growth and margins. The repeated emphasis on a large executable order book, steady deal wins, and a quantified FY26 organic growth outlook is central to how the stock is being positioned versus peers. The notes also show a split view across the broader IT pack, where some brokerages are cautious on large caps due to AI-related disruptions, while selectively preferring mid-sized names. Meanwhile, the acquisition discussion introduces a clear trade-off: capability expansion and vertical access versus the integration risk and potential equity dilution risk flagged for the next year.

Conclusion

Motilal Oswal’s latest positioning keeps Coforge as a preferred mid-tier IT pick, supported by cited order intake, a USD 1,600 million executable order book, and margin improvement assumptions of 100-150 bps. Broker notes show multiple valuation frames, including target prices of Rs 1,800 and Rs 2,400, while broader commentary indicates continued interest in select mid-sized IT names amid an evolving AI services cycle. The next set of quarterly updates and deal conversion commentary will remain the key checkpoints referenced across these broker narratives.