Coforge's stock opened lower on Friday, extending a recent slide as investors weigh the company's plan to raise fresh capital and its talks to buy US digital‑engineering firm Encora for around $1 billion.
Share price reaction
In early trading the shares were down about 0.8%, priced at roughly ₹1,724 on the NSE. Over the past five sessions the stock has slipped 6.5% and is down more than 10% for the year, lagging some larger IT peers.
Potential Encora acquisition
Sources say Coforge has been in advanced talks with Encora, which is backed by private‑equity firm Advent International. If the deal goes through, it would be one of the biggest IT‑sector transactions in recent years and could add cloud, data and product‑engineering capabilities to Coforge’s portfolio.
Fundraising proposal
The board is set to meet on December 26 to consider a new fundraising round. While the company has not linked the raise to the Encora deal, investors are recalling Coforge’s last big capital raise – a ₹2,240‑crore qualified institutional placement (QIP) that helped fund the purchase of Cigniti Technologies.
Company performance and outlook
Despite the market jitters, Coforge remains a fast‑growing mid‑tier IT firm. Revenue for FY25 jumped 32% to over ₹12,050 crore (about $1.45 billion). Margins improved and the workforce grew more than 35% to 33,497 employees.
- Targeting a $2 billion revenue run‑rate in the next few quarters.
- Committed to keeping at least a 14% EBIT margin each quarter.
- Focusing on scaling its healthcare and public‑sector businesses rather than entering new verticals.
- AI‑led automation now contributes roughly 8% of revenue.
What to watch
Investors will be listening closely to the analyst meeting scheduled for later today. Management’s comments on the fundraising plan and any updates on the Encora talks could move the stock further.
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.