Coforge Q2 Review: IDBI Capital Maintains 'Buy', Hikes Target Price — Here's Why

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IDBI Capital Report

Coforge Ltd. reported a strong Q2 FY26 with consolidated revenue of Rs 3,855 crore ($462 million), growing 8.1%/26.7% QoQ/YoY in INR terms, driven by robust growth in Travel (+6.4%), Healthcare, Retail and Hi-Tech (+5.9%), Insurance (+1.8%), and BFSI (+4%) sectors.

Ebit margin expanded 251bps QoQ to 14%, supported by lower ESOP costs and operating leverage, despite higher hedge losses. PAT margin improved to 9.4%.

Order intake reached $514 million with five large deals, lifting the executable order book to $1.63 billion, up 26.7% YoY. Employee strength increased to ~35,000 with a low attrition rate of 11.4% and utilization at 82.3%.

Free cash flow was strong at $37 million, with a healthy FCF to PAT ratio of 86%. Management reaffirmed FY26 guidance targeting 14% Ebit margin and 70-80% FCF conversion, with FY27 revenue aimed at $2 billion.

Company’s distinctive AI-led solutions, including proprietary platforms across automation and software engineering, fuel its ongoing enterprise transformation work and margin expansion.

We reiterate our Buy rating, valuing the stock with an upgraded target price of Rs 2,030, implying 38.1x FY27E EPS.

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