The entire IT pack is under pressure today and Coforge share price is down 3%. In fact the stock is down 12% over 1 month and slumped 25% so far in 2025. Despite that Jefferies has reiterated its Buy recommendation on the stock with a price target of Rs 10,100. It implies 32% upside from current levels.
The three reasons are- Jefferies remains bullish on Coforge’s long-term growth potential.
Global brokerage firm Jefferies remains optimistic about Coforge, reiterating its ‘BUY’ rating with a price target of Rs 10,100. The brokerage believes that the recent 22% correction in the stock has made its valuation attractive, trading at approximately 33 times its estimated FY26 earnings.
“Coforge remains our high-conviction pick within Indian IT,” added the brokerage in its report.
Jefferies on Coforge: Consistent revenue growth even in challenging time
According to the brokerage report, the IT players has reported a strong revenue growth, outperforming its peers in both strong and weak demand cycles.
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Between FY20 and FY23, the company achieved a 17% CAGR in revenue, the highest among its competitors. Even during the current slowdown, Coforge has sustained a 14% CAGR, compared to an industry average of just 2%.
Furthermore, the brokerage in its report noted, “Given that our current FY26 revenue forecast of $1.77 billion is at the lower end of the expected range, the downside risks appear limited.”
Jefferies on Coforge: Margin expansion and debt reduction to drive profit growth
Coforge’s profitability is set to improve as wage pressures ease and foreign exchange trends turn favourable.
The brokerage firm expects a 100 basis point expansion in gross margins over FY25-27, supported by stable selling, general, and administrative (SG&A) expenses. Additionally, a reduction in ESOP costs (80 bps) and depreciation (50 bps) should help the company achieve a 15% EBIT margin by FY27.
“Over FY25-27E, we expect Coforge to repay the majority of its debt through internal accruals, which along with lower minority interests post takeover of 100% stake in Ciginiti in FY26 should boost recurring PAT growth at ~44% CAGR,” added the brokerage in its report.
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