Coforge shares surge 6%, rally 16% in three days post Q4 results. What's ahead for investors?

Synopsis

Coforge shares saw a significant jump following robust Q4 financial results. The company reported a substantial surge in net profit and revenue. Analysts are optimistic, with several brokerages issuing 'Buy' recommendations. Strong deal wins and an expanding order book fuel confidence for future growth. The acquisition of Encora is also expected to boost revenue.

Shares of Coforge jumped 6% on Friday to hit an intraday high of Rs 1,359.7 apiece on the NSE, extending their strong rebound. The stock has climbed over 16% in the past three sessions as upbeat Q4 results fuelled bullish brokerage views. Coforge has now bounced back nearly 35% in under two months from its 52-week low of Rs 1,008.10 recorded on March 17.

Coforge Q4 Results

Coforge on May 5 reported a net profit of Rs 612.3 crore for the January-March quarter of the financial year 2026, marking a whopping 134% surge from the Rs 261.2 crore net profit reported in the corresponding quarter of the previous financial year. Its revenue from operations, meanwhile, jumped 30% year-on-year (YoY) to Rs 4,450 crore during the quarter under review.

Speaking about the performance, Coforge CEO Sudhir Singh said, “FY26 marked another year of exceptional performance for Coforge. We delivered strong YoY growth at 29.2% and expanded EBIT margins materially by 370 bps to 14.4%. With an order executable of $1.75 billion, we enter FY27 with strong momentum and confidence. We expect to deliver robust revenue growth in FY27 and plan to deliver an EBITDA of more than 20.5% on a consolidated basis in FY27.”

Should you buy, sell or hold Coforge shares?

The international brokerage said the IT company’s Q4 results beat expectations, supported by stronger-than-anticipated margins and improved free cash flow conversion. It highlighted solid deal wins and a 16% YoY increase in the executable order book, which, despite the ongoing clean-up of the low-margin India business, offers visibility for double-digit organic growth.

Jefferies raised its earnings estimates by 9–11% on a better margin outlook and now expects a 23% EPS CAGR over FY27–29, noting that valuations at 19x one-year forward PE remain attractive.

Nomura also has a ‘Buy’ rating on Coforge shares and raised the target price to Rs 2,100 after the Q4 results. This indicates a 63% upside potential.

The international brokerage noted that the company secured six large deals worth $648 million in Q4, while the executable order book for the next 12 months grew 16% year-on-year to $1.752 billion.

The brokerage noted that this excludes framework agreements from US public services, which could provide additional support to growth. It expects flat sequential performance in Q1 FY27 due to the ongoing exit from low-margin India operations, but believes Coforge will still outperform industry growth through FY27. The acquisition of Encora, completed in April, is projected to add roughly $550 million in revenue in FY27, while core organic growth is estimated at around 11%.

Also read: LIC’s $2 billion contrarian bet: 10 stocks the DII giant bought while the market bled

Nuvama Institutional Equities and Motilal Oswal also have ‘Buy’ calls on the shares of Coforge, while Elara Capital recently upgraded its rating for the IT stock to ‘Accumulate’.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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