Buy Coforge, target price Rs 5570: Axis Securities

Axis Securities has buy call on Coforge with a target price of Rs 5570. The current market price of Coforge Ltd. is Rs 4997.35. Time period given by analyst is one year when Coforge Ltd. price can reach defined target.
Coforge Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 30547.83 Crore) operating in IT Software sector.

Coforge Ltd. key Products/Revenue Segments include Sale of services and Software Products for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-09-2021, the company has reported a Consolidated Total Income of Rs 1577.10 Crore, up 6.73 % from last quarter Total Income of Rs 1477.70 Crore and up 36.24 % from last year same quarter Total Income of Rs 1157.60 Crore. Company has reported net profit after tax of Rs 161.50 Crore in latest quarter.

Investment Rationale
Coforge has a robust business structure coupled with multiple long-term contracts spread across verticals which will help it generate sustainable growth momentum moving ahead. The brokerage recommends a BUY and assign 31x P/E multiple to its FY24E earnings of Rs 177.7/share which gives a TP of Rs 5,570 /share, implying an upside of 10% from CMP.


Promoter/FII Holdings
Promoters held 50.18 per cent stake in the company as of 30-Sep-2021, while FIIs owned 20.67 per cent, DIIs 18.64 per cent.