Coforge Q4FY26 results push stock up; targets to 47%

Why Coforge shares jumped on May 6

Coforge shares saw sharp buying in early trade on Wednesday, May 6, after the mid-cap IT services firm reported a multifold rise in consolidated net profit for Q4FY26. The stock moved quickly to the upper circuit as investors reacted to the earnings beat and upbeat brokerage commentary. The rally also came on a positive day for the broader market, with the Nifty 50 trading higher.

The post-results move put brokerage calls in focus, with Elara Capital upgrading the stock and Choice Institutional Equities reiterating a ‘Buy’ with a materially higher target. The two notes highlighted different drivers, but both pointed to growth visibility through the order book and improving profitability.

Price action: upper circuit and revised limits

After the results, Coforge share price climbed as much as 10% to hit the upper circuit of ₹1,285.60 per share during morning trade on the NSE. Trading later resumed after the exchange revised the upper circuit to ₹1,344 per share.

At 09:48 AM, the stock was trading at ₹1,268, up 8.49% from its previous close of ₹1,168.80 on the NSE. The buying interest remained strong through early deals, reflecting a quick re-rating after the quarterly numbers.

Market context: Nifty also in the green

The broader tape was supportive. At the same time, the Nifty 50 was trading up 109 points, or 0.45%, at 24,141. While Coforge’s move was stock-specific, the positive benchmark tone reduced immediate risk-off pressure in the sector.

Q4FY26 financials: profit jumps, revenue up 30%

Coforge reported consolidated net profit (attributable to owners of the company) of ₹612.3 crore in Q4FY26. This was described as a multifold jump from ₹261.2 crore in the corresponding quarter of the previous fiscal year.

Revenue from operations rose 30% year-on-year to ₹4,450.4 crore in Q4FY26, compared with ₹3,422.2 crore a year ago. The combination of higher revenue and improved profitability fed into the sharp market reaction.

Expenses also rose, but slower than revenue

The quarter also showed cost pressures, though at a lower pace than topline growth. Total expenses increased 24% year-on-year to ₹3,794 crore in Q4FY26, compared with ₹3,060 crore in Q4FY25.

For investors, the expense trajectory matters because it determines whether the revenue growth is translating into operating leverage. Brokerages cited operating leverage and business-mix actions as factors that can support margins over time.

Elara Capital upgrades to ‘Accumulate’; target ₹1,380

Elara Capital upgraded Coforge to ‘Accumulate’ from ‘Reduce’ and set a target price of ₹1,380. The target is based on 21x (unchanged) FY28E P/E, as per the note.

Elara pointed to stronger Q4 growth in healthcare, travel and emerging verticals. It also noted BFSI revenue growth was relatively muted due to a client-specific issue. The brokerage said the target price implies upside potential of 7.34% from the current market price.

Elara added that the executable order book remains strong and that, even with a conservative book-to-bill multiple, mid-teen growth is a possibility in FY27. It also factored in a USD 40–50 million annual loss due to the exit of a low-margin India business. Based on these assumptions, it built in 14% USD revenue growth during FY26–28E and expects a 17% earnings CAGR over the same period.

Choice Institutional Equities maintains ‘Buy’; target ₹1,900

Choice Institutional Equities retained a ‘Buy’ rating on Coforge with a target price of ₹1,900. The target is based on FY28E EPS of ₹67.8, according to the report.

Choice said the target implies an upside potential of 47.79% from the current market price. Analysts Dhanshree Jadhav and Shreya Mehra wrote that Coforge’s Q4FY26 performance reinforces confidence in its growth and margin trajectory, supported by strong deal momentum, robust client mining and a healthy executable order book.

They also flagged margin expansion to 16.6%, attributing it to effective cost control and early benefits from AI-led efficiency. The note said that while the exit from low-margin businesses may keep near-term growth (Q1FY27) subdued, it reflects a strategic pivot towards higher-quality, margin-accretive growth.

Strategy cues highlighted by analysts: exits, AI and execution

Both brokerages referenced the company’s efforts to improve business mix. Elara explicitly modeled the impact of exiting a low-margin India business and linked this to operating leverage-driven profitability. Choice framed the exit from low-margin areas as a deliberate move to improve the quality of growth, even if it softens a near-term quarter.

Choice also referenced outcome-based delivery initiatives such as Agentic AI and “Mod Squads”, along with internal AI adoption. It said this, combined with large-deal traction, Encora-led synergies and scaling AI capabilities, provides visibility for FY27E and supports improving profitability and cash conversion.

Key numbers at a glance

What investors may track next

Near-term, the brokerage notes suggest investors will watch how the business-mix changes affect growth and margins, especially around the low-margin exits flagged for Q1FY27. Execution against the “healthy executable order book” referenced by both brokerages will remain a key marker for revenue conversion.

Choice expects revenue, EBIT and PAT to grow at a CAGR of 21.2%, 25.7% and 29.9% respectively over FY26–FY29E, while Elara expects 14% USD revenue growth during FY26–28E and a 17% earnings CAGR for the same period. Any future updates from the company on vertical performance, client-specific issues in BFSI, and progress on AI-led efficiency will also influence how the market sustains the re-rating after the upper-circuit move.