Coforge Q4 FY26: Targets up to Rs 2,100 after beat

Stock rebounds with Nifty IT, but six-month trend remains weak

Shares of Coforge Ltd ended 4.95% higher at Rs 1,347, tracking a rebound in the Nifty IT index, which gained 2.43%. The stock also jumped about 6% intraday to Rs 1,359.7 on the NSE. Over the past three sessions, it has risen more than 16% as Q4 FY26 results triggered a fresh round of bullish brokerage notes. Even after the rebound, the stock is still down 24.43% over the past six months. Coforge has bounced back nearly 35% in under two months from its 52-week low of Rs 1,008.10 recorded on March 17.

Q4 FY26 earnings: profit surge and strong topline growth

Coforge reported Q4 FY26 (January to March) net profit of Rs 612.3 crore, up 134% year-on-year from Rs 261.2 crore. Revenue from operations rose 30% year-on-year to Rs 4,450 crore in the quarter. Geojit said EBITDA grew 56.2% year-on-year to Rs 917 crore in Q4 FY26, and it pegged EBITDA margin at 20.6% after a 340 bps year-on-year expansion. Separately, Jefferies (as cited by Reuters) highlighted a 230-basis-point sequential jump in EBITDA margin to 16.6%, driven by lower costs and operating leverage. Brokerages also pointed to improving free cash flow conversion in Q4, supporting the view that the quarter beat expectations on profitability.

Vertical-led growth: healthcare and travel standout in Geojit note

Geojit attributed the revenue rise to sharp growth across multiple verticals. It highlighted healthcare growth of 78.4% year-on-year and travel and hospitality growth of 59.2% year-on-year. Insurance grew 14.5% year-on-year, while government performance was up 31.3% year-on-year. The brokerage also flagged broad-based geographic expansion as supportive of resilience and diversified growth momentum. The vertical mix matters because Coforge operates across banking, insurance, travel, healthcare and the public sector, where deal cycles and budgets can vary materially.

Deal wins and order book: key driver for FY27 visibility

Multiple brokerages focused on Coforge’s deal momentum in FY26 and its order book entering FY27. Geojit said deal momentum remained robust in FY26, with 21 large transactions closed. It added that Q4 recorded a healthy order intake of $148 million, while the executable order book expanded to $1.75 billion, reflecting 16.4% year-on-year growth. Nomura, after Q4, cited six large deals worth $148 million in Q4 and put the executable order book for the next 12 months at $1.752 billion, up 16% year-on-year. A strong executable order book is central to broker expectations for double-digit organic growth, even as the company trims its lower-margin India business.

Management commentary: FY27 EBITDA guidance and margin ambitions

Coforge CEO Sudhir Singh said FY26 delivered strong year-on-year growth of 29.2% and an EBIT margin expansion of 370 bps to 14.4%. He added that with an order executable of $1.75 billion, the company is entering FY27 with “strong momentum and confidence.” Singh also said Coforge expects to deliver robust revenue growth in FY27 and plans to deliver EBITDA of more than 20.5% on a consolidated basis in FY27. Broker notes also referenced an ongoing exit from low-margin India operations, which some analysts expect to impact near-term sequential performance.

Brokerage calls: targets lifted across the Street

Geojit recommended a ‘Buy’ in the Rs 1,350 to Rs 1,390 range, with a target price of Rs 1,670 over the next three to six months and a suggested stop loss at Rs 1,100. Axis Direct maintained a ‘BUY’ rating with a target of Rs 1,690, citing growth potential backed by deal wins and execution. Jefferies reiterated ‘Buy’ and raised its price target to Rs 1,860 from Rs 1,620, calling Coforge a preferred pick in the sector (Reuters report). Nomura retained ‘Buy’ and raised its target price to Rs 2,100 after Q4, and HSBC maintained a ‘Buy’ with a target price of Rs 1,710.

Valuation debate: forward P/E varies by source

Geojit said market consensus indicates Coforge is trading at a one-year forward P/E of 23x versus a three-year average P/E of 34x. Jefferies described valuations at 19x one-year forward P/E as attractive and raised its earnings estimates by 9% to 11% on a better margin outlook, while projecting a 23% EPS CAGR over FY27 to FY29. Reuters, citing LSEG data, said Coforge trades at a 12-month forward P/E of 21.47 versus an industry average of 18.42. The different valuation references reflect differing data cut-offs and peer sets, but broker narratives were broadly aligned that the post-results re-rating still leaves room versus longer-term averages.

Market activity: heavy volumes, options positioning turns bullish

A Reuters report dated May 6 said Coforge added more than $100 million in market capitalisation on Wednesday and closed 9.5% higher at Rs 1,280. The stock logged its best session in more than a year and led gains on the Nifty IT index, which rose 0.5% that day. Reuters also reported unusually high activity with about 27 million shares changing hands, nearly nine times the 30-day average, marking its busiest day since 2023. NSE data cited by Reuters showed a put-call ratio of 0.53, signalling bullish positioning, while options traders unwound bearish positions with the 1300 contract the most active. Such positioning data does not guarantee follow-through, but it captured the shift in sentiment after management guidance and margin upside.

Acquisition and near-term risks flagged by brokerages

Nomura noted that it expects flat sequential performance in Q1 FY27 due to the ongoing exit from low-margin India operations, though it still expects Coforge to outperform industry growth through FY27. It also said the acquisition of Encora, completed in April, is projected to add roughly $150 million in revenue in FY27, while core organic growth is estimated at around 11%. HSBC cautioned that growth could moderate because of the exit from lower-margin segments, though it still pointed to the order book supporting low-teens visibility. These points underline that the FY27 growth profile may be shaped by both portfolio clean-up and integration benefits.

Key numbers at a glance

Conclusion: results-led re-rating meets FY27 execution test

Coforge’s rebound has been driven by Q4 FY26 earnings outperformance, stronger profitability metrics cited by brokerages, and visibility from a $1.75 billion executable order book. Management’s FY27 EBITDA guidance of more than 20.5% has added to the shift in sentiment, even as analysts track the impact of exiting low-margin India operations. Brokerages have largely stayed positive, with targets ranging from Rs 1,670 to Rs 2,100 in the notes cited. The next phase for the stock will likely hinge on how order intake converts to revenue, the pace of margin delivery, and updates on integration progress such as Encora’s contribution in FY27.