Coforge has bought Encora, a U.S. engineering and AI services company that earned about $500 million last year.
Deal Overview
The acquisition will increase Coforge’s FY26 estimated revenue by roughly 26%. Encora brings about 9,300 employees, giving a higher revenue per employee ($74k) compared with Coforge’s $69k, and it operates at better profit margins.
Potential Benefits
- Higher margins: Encora’s business model is more profitable, which can improve Coforge’s overall earnings.
- Stronger industry mix: Encora focuses on high‑tech and healthcare, aligning with Coforge’s plan to grow these segments.
- EPS accretion: Management expects earnings per share to rise from day one.
- Talent and capabilities: The deal adds skilled staff and AI expertise, though retaining this talent will be crucial.
Valuation and Outlook
Analysts see Coforge as a solid mid‑tier IT player that can benefit from the trend of vendors consolidating and companies cutting costs. They value the firm at about 32 times FY28 earnings, suggesting a target price of INR 2,500 per share, which implies roughly a 49 % upside from current levels.
Remember, this is just one perspective, not a prediction. Do your own research and consider consulting a qualified advisor before making any investment decisions.