Coforge shares rise 2% as CLSA initiates coverage with 'outperform' rating; 51% upside seen

Shares of midcap IT company Coforge gained as much as 2% to their day’s high of Rs 1,584 on the NSE on Tuesday, September 30, after international brokerage firm CLSA initiated coverage on the counter with an outperform rating, citing positive levers of growth. With today’s gain, the stock is up for a second session in a row.

As per a CNBC TV-18 report, the Hong Kong-based brokerage has set a price target of Rs 2,346 for the stock, indicating a potential upside over 51% from Monday’s close of Rs 1,552per share on the NSE.

CLSA noted that Coforge ranks among the top 10 Indian IT services firms by revenue, with nearly two-thirds of its topline coming from the financial services and travel verticals. The company’s strong execution in these segments is reflected in its robust order book, revenue momentum and earnings performance, it said.


The brokerage expects Coforge’s revenue to grow at a compounded annual growth rate (CAGR) of 15 percent between FY26 and FY28, while EBIT and EPS are projected to rise at a CAGR of 16 percent and 22 percent, respectively, over the same period.

IT stocks have been grappling with a host of headwinds such as the $100,000 fee on new H-1B visa applications, weak demand, poor earnings growth, AI threats and US Hire Act. Further, FIIs have been relentless sellers in IT stocks over the past couple of months.

Q1 Performance Snapshot

The company posted a consolidated net profit of Rs 317 crore for the first quarter of FY26, up 21.5% sequentially and 138.4% year-on-year. Revenue rose 8.2% quarter-on-quarter to Rs 3,689 crore. However, the results slightly missed Bloomberg consensus estimates, which had pegged net profit at Rs 335 crore and revenue at Rs 3,723 crore.

While revenue and profit rose sharply on a year-on-year basis, Coforge reported a contraction in operating margin. Ebitda margin for the quarter stood at 17.5%, up 61 basis points from the previous quarter.

At about 9:40 am, shares of the company were trading at Rs 1,564, higher by 0.8% from the last close on the NSE. Coforge shares have fallen nearly 20% on a year-to-date basis.

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