Coforge shares rose over 4% on Monday after Nuvama Institutional Equities and JM Financial raised their price targets on the back of the company’s strong September-quarter performance. Brokerages see sustained growth as management delivers steady margins, strong cash flow, and a visible order book. Both brokerages have a Buy rating on the stock and have raised their 12-month price target for the counter.
As the time of writing this report Coforge’s share price was trading around Rs 1,830 on the NSE. The latest upgrades mark renewed optimism in the mid-cap IT space, where Coforge stands out for maintaining revenue growth despite a cautious spending environment.
JM Financial forecasts sales of Rs 1.62 lakh crore in FY26, rising to Rs 2.17 lakh crore by FY28, with profit climbing from Rs 13,968 crore to Rs 22,276 crore over the same period. Nuvama’s projections are broadly in line, signalling consensus confidence in the earnings trajectory. Here is a detailed analysis of what’s powering the bullish brokerage calls.
Nuvama on Coforge: strong execution earns a re-rating
The upgrade by Nuvama followed another strong quarter from the IT services firm, which not only met expectations but also delivered what the Street had been waiting for a clean set of results, free from any accounting adjustments or one-offs. Nuvama said the company “put to rest all concerns on margins and cash flows.”
The brokerage expects earnings to rise faster than it previously modelled EPS for FY26 and FY27 have been revised up by 2.6% and 4.6%, respectively. The report added that the clean margin print, improved free cash flow, and stable 14% EBIT margin guidance build the case for a sustained re-rating. Nuvama projects revenue of Rs 1.62 lakh crore for FY26, rising from Rs 1.21 lakh crore in FY25, and sees profit touching Rs 14,205 crore. Return on equity is forecast at 20.4%.
Nuvama’s analysts also pointed out that Coforge has kept its cash generation ratio (FCF to PAT) in the 70–80% band, which they called a “rare consistency” in the mid-cap IT space.
JM Financial on Coforge: Quietly strong, finally clean
JM Financial Institutional Securities echoed that sentiment and reiterated that Coforge “met elevated expectations” and, more importantly, “delivered clean results” after several quarters of noisy prints.
According to JM Financial, revenue grew 5.9% QoQ in constant currency and 25.7% YoY, led by the Travel and Americas segments, largely from the ramp-up of the Sabre deal. EBIT margin expanded to 14%, exactly in line with its 13.8% forecast.
The brokerage highlighted that this was the first quarter in a while without any GAAP to non-GAAP adjustments. “GAAP and reported margins were the same,” it said, calling this “a welcome change that should quieten a key investor concern.”
JM Financial also noted that operating cash flow rose 8% QoQ even though the base quarter had a one-time client prepayment. Capex normalised, pushing free cash flow to profit conversion to 86% a sharp turnaround from negative 56% in the previous quarter.
Coforge: Deal wins steady, order book strengthens
Coforge’s order intake stood at $514 million (around Rs 4,500 crore) in Q2, taking its last twelve months’ total contract value to $3.6 billion (Rs 30,000 crore). The 12-month executable order book rose 6% sequentially to $1.63 billion (Rs 13,900 crore), up 27% year-on-year.
The company signed five large deals this quarter two new insurance contracts and one in travel from North America, along with two in Asia-Pacific. In the first half of FY26, Coforge has already closed 10 large deals, compared with 14 in the entire FY25.
Both brokerages noted that this steady deal flow, even in a cautious IT spending environment, shows Coforge’s deeper client engagement and ability to win transformation programs despite slower discretionary spending across the industry.
Coforge margins and operations: Discipline takes hold
Coforge margins were helped by lower selling and administrative costs and reduced ESOP expenses. Hedge losses of about Rs 30.7 crore acted as a drag, but this was offset by operational efficiency.
Management said a wage hike from October would impact Q3 margins by 100–150 basis points, though this would be partly cushioned by lower depreciation as a share of revenue and cost benefits from automation.
The company ended the quarter with 34,896 employees, adding 709 people sequentially, most of them in billable roles. Utilisation held at 82%, while attrition remained low at 11.4%, one of the best in the sector.
JM Financial also highlighted a rise in revenue per employee, from $67,000 to $70,000 (Rs 56–58 lakh), helped by productivity initiatives and early benefits from the firm’s AI-driven service model.
Target price for Coforge as per JM Financial and Nuvama
Nuvama Institutional Equities has raised its 12-month target price for Coforge to Rs 2,250 from Rs 2,000 earlier, valuing the stock at 38 times average FY27–FY28 earnings. The brokerage retained its Buy rating, noting that the “clean quarter, stable margins and strong cash flow conversion” remove earlier concerns and justify a valuation re-rating.
JM Financial Institutional Securities, meanwhile, maintained its Buy call with a revised target price of Rs 2,040 (up from Rs 1,850 earlier) and a valuation multiple of 35x forward earnings. The brokerage said the absence of one-offs and alignment between GAAP and reported margins “restores confidence in earnings quality” and supports a higher multiple going forward.
