Coforge stock rebounds 9% from day's low; brokerages back growth outlook after Q2 results

The stock has gained 18.4 percent so far in 2026, outperforming the Nifty 50, which has declined 13.5 percent. The company's market capitalisation stood at approximately Rs 86,900 crore. While second-quarter revenue missed expectations, stronger margins and improved profitability guidance supported the brokerage outlook. UBS, Nomura and Jefferies maintained Buy ratings, while Citi retained its Sell recommendation.

UBS maintained its Buy rating with a target price of Rs 2,460, implying an upside of more than 29 from Friday’s closing price. The brokerage said revenue growth was broadly in line with expectations, while margins were slightly better. Consolidated revenue grew 10.9 percent sequentially in constant currency terms, against its estimate of 11.4 percent. Organic growth stood at 3.8 percent. EBIT margin of 16 percent marginally exceeded expectations, although reported earnings were affected by lower net other income and exceptional integration costs.

Nomura retained its Buy rating with a target price of Rs 2,300. The brokerage highlighted strong deal wins and improving margins as key growth drivers. Organic revenue growth of 3.8 percent was broadly in line with expectations, while EBIT margin met estimates. Free cash flow stood at $53.8 million, equivalent to 89 percent of profit after tax. Jefferies maintained its Buy rating with a target price of Rs 2,230.

The brokerage highlighted a 7 percent sequential increase in the executable order book, a strong deal pipeline and an improved margin outlook. It expects compound annual growth rates of 14 percent in organic constant-currency revenue and 26 percent in earnings per share. Jefferies raised its EPS estimates by 3-5 percent, saying strong earnings delivery could sustain the stock's outperformance following its 56 percent rally over six months.

Citi retained its Sell rating with a target price of Rs 1,750, implying approximately 8 percent downside from Friday’s closing price. The brokerage flagged weaker-than-expected revenue growth of 10.9 percent against its estimate of 12.3 percent. It also highlighted the need to monitor organic order-book growth and cash conversion trends. Coforge reported a 56.5 percent year-on-year rise in consolidated net profit to Rs 588.1 crore, while revenue increased 53.6 percent to Rs 6,170.8 crore.

Sequentially, net profit rose 13.4 percent and revenue grew 11.6 percent, both missing CNBC-TV18 poll estimates. EBITDA increased 67.3 percent year-on-year to Rs 1,269.7 crore, with the margin expanding to 20.6 percent. Coforge raised its FY27 EBIT margin guidance to 16 percent from 15.5 percent and expects margins to reach 17 percent next year.