Buy Coforge, target price Rs 5450: Sharekhan by BNP Paribas
The stock price has corrected around 28% from its 52-week high, while the stock prices of other mid-tier companies have corrected by 10-20% from their respective 52-week peak.
By ETMarkets.com | Updated:
Sharekhan by BNP Paribas has buy call on Coforge with a target price of Rs 5450. The current market price of Coforge is Rs 4460.15.
Coforge, incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 27106.32 Crore) operating in IT Software sector.
Coforge key Products/Revenue Segments include Sale of services and Software Products for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1662.90 Crore, up 5.44 % from last quarter Total Income of Rs 1577.10 Crore and up 39.13 % from last year same quarter Total Income of Rs 1195.20 Crore. Company has reported net profit after tax of Rs 197.20 Crore in latest quarter.
Investment Rationale
Coforge’s deep domain expertise in select industry verticals with heavy investments on technology, proprietary products and resources position it to participate in customers’ transformation journey. Further, its strategic focus on diversifying the business into new emerging verticals, improvement in client metrics, strong executable orders, and better client mining would help it drive the next leg of growth.
The stock price has corrected around 28% from its 52-week high, while the stock prices of other mid-tier companies have corrected by 10-20% from their respective 52-week peak. The brokerage is positive on Coforge on outstanding execution over last few years, strong earnings visibility, healthy cash generation and improving ROIC. Thus, the brokerage has re-initiated coverage on Coforge with a Buy rating and a price target of Rs 5,450.
Promoter/FII Holdings
Promoters held 49.97 per cent stake in the company as of 31-Dec-2021, while FIIs owned 19.12 per cent, DIIs 20.28 per cent.
Coforge, incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 27106.32 Crore) operating in IT Software sector.
Coforge key Products/Revenue Segments include Sale of services and Software Products for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1662.90 Crore, up 5.44 % from last quarter Total Income of Rs 1577.10 Crore and up 39.13 % from last year same quarter Total Income of Rs 1195.20 Crore. Company has reported net profit after tax of Rs 197.20 Crore in latest quarter.
Investment Rationale
Coforge’s deep domain expertise in select industry verticals with heavy investments on technology, proprietary products and resources position it to participate in customers’ transformation journey. Further, its strategic focus on diversifying the business into new emerging verticals, improvement in client metrics, strong executable orders, and better client mining would help it drive the next leg of growth.
ADVERTISEMENT
Coforge is expected to report revenue/earnings growth at 17%/22% CAGR, respectively, over FY2022-24E, which is one of the fastest growth among mid-tier IT services companies. At CMP, the stock trades at 32x/27x of its FY2023E/FY2024E earnings.The stock price has corrected around 28% from its 52-week high, while the stock prices of other mid-tier companies have corrected by 10-20% from their respective 52-week peak. The brokerage is positive on Coforge on outstanding execution over last few years, strong earnings visibility, healthy cash generation and improving ROIC. Thus, the brokerage has re-initiated coverage on Coforge with a Buy rating and a price target of Rs 5,450.
Promoter/FII Holdings
Promoters held 49.97 per cent stake in the company as of 31-Dec-2021, while FIIs owned 19.12 per cent, DIIs 20.28 per cent.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
