Coforge eyes $2-billion revenue run rate by Q4

Coforge has set a target of hitting $2 billion in annualised revenue run rate by the fourth quarter of this fiscal, the IT services company’s management said in its Investor Day on Monday.

It prompted at least four major brokerages to issue reports on Coforge, betting that a mix of AI-led transformation, proactive large deals and focused bets in select verticals will keep it among the fastest-growing IT services firms despite a still-uneven demand environment.

While Coforge’s management pointed out that tech spending is being reinvented rather than shrinking, analysts noted that client budgets could be lower in 2026, especially for RFP-driven (request for proposal) deals.


“Clients are open to spending on tech transformation programs led by new technology, while it is a difficult market for RFP driven companies that are primarily ‘order takers’,” analysts at Nuvama noted.

ICICI Securities highlighted that the company is seeing a contraction in project execution timelines as a result of AI-led automation, rather than a reduction in clients’ IT budgets.

Coforge reiterated a minimum 14% EBIT (earnings before interest and taxes) margin aspiration and at least 70% free cash flow-to-profit after tax (PAT) conversion over the next five years, even as it plans to stop giving formal revenue and margin guidance beyond FY27 to retain flexibility.

Motilal Oswal reiterated its ‘buy’ rating, highlighting that Coforge’s “strong executable order book and resilient client spending across verticals bode well for its organic business.” The brokerage anticipates a 54% upside to its stock.

Nuvama expects its deal wins, along with the order book, to ensure growth. The company has already closed 10 large deals in H1FY26 and is targeting 20 for the year, compared with 15 in FY25.

Coforge expects to close its Cigniti merger in the next few weeks, and mentioned that any future acquisition is likely to be EPS accretive from year one and focus on client access rather than capability building.

Nuvama cited earlier buys like SLK and Wishworks as evidence that this model can work, while Motilal Oswal and Emkay described Cigniti as a strategically synergistic asset for quality engineering and testing, with Emkay building in roughly a 5% EPS uplift from the merger.

Market participants were, however, less impressed. The stock fell 4% to close at Rs 1,873.40 on the BSE on Tuesday.

Analysts at Motilal Oswal flagged that in the current environment, margins could be “at risk” versus the company’s hard 14% floor, even if they improve meaningfully year-on-year.