Coforge, an Indian IT services company, has been growing quickly, posting about a 14% yearly increase in revenue from FY20 to FY25.
Key Growth Figures
- Organic revenue grew at a compound annual growth rate (CAGR) of ~14% over the last five years.
- Banking, financial services and insurance (BFSI) and travel‑technology‑hospitality (TTH) together make up about half of the revenue.
- Healthcare also contributed strongly to the growth.
Order Book Gives Visibility
The company has an executable order book worth roughly $1.6 billion, which translates to about 80% of its future revenue being visible.
In the first half of FY26, Coforge already won ten large deals, compared with fourteen deals for the entire FY25 year, supporting confidence in continued mid‑teens growth.
Client Base Expands
The number of mid‑size and large clients has risen at more than 20% CAGR over the past five years. This reflects deeper relationships and scaling efforts.
Acquisitions such as SLK, Cigniti and the recent purchase of Encora help the company add new, scalable accounts.
Profitability Outlook
Operating margins are expected to settle around 14% in the medium term because of higher amortisation and the time it will take for Encora to deliver full synergies.
Analyst Recommendation
We are starting coverage on Coforge with a “Buy” rating and a target price of ₹2,140, which is about 32 times the estimated FY28 earnings. This suggests a potential upside of roughly 32%.
Coforge is positioned as a leader in its field, thanks to deep expertise across multiple industry verticals.
Disclaimer: This is my perspective, not a prediction. Always do your own research before making any investment decisions.