Coforge recently made notable announcements including- A large, multi-year deal win with U.S based Sabre Corporation of $1.6 billion. Acquisition of U.S based data and cloud engineering firm Rythmos for $48.7 million, Acquisition of Australia-based ‘ServiceNow' implementation firm TMLabs for AUD 20 million (~$12.5 million) and stocksplit in the ratio of 1:5.
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Dolat Capital Report
We view Coforge Ltd.'s deal-win as impressive, showcasing ability to secure large contracts and build trust for mega deals. With five acquisitions within a year (Cigniti, Opt ML, Xceltrait, and now Rythmos and TMLabs) Coforge is well placed to meet its $2 billion target by FY'27E.
We have upgraded FY26E/FY27E revenue estimate by 6.5%/7.2%, but merger and acquisition, deal execution and transition-related expenses may mildly lower earnings estimates.
Overall earnings remain largely unchanged or adj. by 1% for FY26E/FY27E. Given correction and an enhanced growth outlook, we upgrade our rating to ‘Accumulate' with a revised target price of Rs 8,400 (valued at 35 times on FY27E earnings).
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