For Coforge, the acquisition of US-based Encora is less about immediate market reaction and more about execution over the next 12–18 months, analysts said. The $1.89 billion all-stock transaction, valued at $2.35 billion at the enterprise level, is the largest deal in Coforge’s history and significantly reshapes its scale, margin profile and balance sheet.
The task before the mid-tier IT services firm is threefold: integrate a business nearly half its size, re-accelerate Encora’s organic growth, and address near-term funding concerns without diluting returns. Analysts broadly agree that strategic logic is in place, but outcomes will hinge on delivery.
Market reaction
Shares of Coforge closed at Rs 1,682.45 on the BSE on Monday, up 0.55%, after a volatile reaction following the deal announcement made after market hours on December 26.
Encora adds a projected FY26 revenue run-rate of about $600 million and an adjusted Ebitda margin of 19% in FY25, higher than Coforge’s standalone margins. Post-acquisition, management expects the combined entity to operate at an Ebit margin of around 14% after amortisation. Coforge has also outlined a revenue ambition of nearly $2 billion from AI-led engineering, data and cloud services by FY27.
Brokerages on the deal
Brokerages such as Jefferies and PhillipCapital said that the deal meaningfully scales Coforge’s presence in hi-tech and healthcare, with each vertical expected to cross a $170-million run-rate, while expanding exposure to the US West and Midwest and adding a near-shore delivery base in Latin America.
“The acquisition helps Coforge’s hi-tech and healthcare verticals to scale to $170m-plus each,” Jefferies said.
Execution risks, however, remain central. Encora’s organic growth has slowed to about 7–8% in recent years, raising questions on how quickly Coforge can lift growth through cross-selling and platform integration. Analysts have also flagged the funding plan, with up to $550 million expected to be raised via a bridge loan or a qualified institutional placement to retire Encora’s term loan.
“A large QIP could be an overhang on the stock in the near term,” Jefferies said.
Management remains confident. “Every acquisition we have done over the last eight years has been successful,” CEO Sudhir Singh said, adding that Coforge would follow the same integration template.