Coforge Q4 Review: Undaunted Commentary For FY27 Target; Dolat Capital Maintains 'Add', Hikes Target Price

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Dolat Capital Report

Coforge Ltd. reported revenue growth of 3.4% constant currency QoQ (beat), led by strong performance in the banking, financial service segment (up 13.5% QoQ), followed by transporation (up 7.3%). Adjusted for divestment of AdvantageGo, CC revenue was up 4.6% QoQ. Adjusted Ebitda was up 101bps at 18.7% QoQ (beat) led by operating leverage.

Buoyed by $1.56 billion Sabre deal, order intake of $566 million (ex. Sabre), confident commentary (despite uncertain macro), and resilient gross margins in large deal execution makes Coforge well placed to meet its FY27 guidance of $2 billion revenue and 18% Ebitda margin (14%+ operating profit margin).

Following a strong Q4 beat and confident commentary, we revise our FY26E/FY27E EPS estimate by unchanged/+3.3% (adj for Divestiture). A healthy order book, large deal win capability and robust execution can support/drive up valuations. Thereby, we maintain our ‘Accumulate’ rating with target price of Rs 8,530, valued at 34x on FY27E earnings.

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