1:5 Stock Split 2025: Motilal Oswal Recommends BUY On Coforge, Target Price Rs 2,200

Motilal Oswal On Coforge:

We recently interacted with COFORGE's CFO to understand the company's growth outlook, execution strategy, and margin trajectory. Key takeaways: 1) COFORGE has reiterated its target of reaching USD2b revenue by FY27, driven by strong organic momentum and cross-selling opportunities from Cigniti; 2) With an executable order book of ~USD1.5b (+47% YoY), near-term revenue visibility remains high, and management expects organic growth in FY26 to outpace FY25 levels; 3) The company's BFSI and transportation verticals remain core growth engines, each delivering +20% YoY growth in FY25 despite a challenging macro environment; and 4) Margin outlook is constructive, with oneoffs behind and levers like delivery mix and lower ESOP costs offering ~100-120bp upside by FY27.

We continue to view COFORGE as a structurally strong mid-tier player well-placed to benefit from vendor consolidation/cost-takeout deals and digital transformation. Cigniti could also prove to be an effective longterm asset. We value COFORGE at 38x FY27E EPS with a TP of INR2,200, implying a 18% potential upside. We reiterate our BUY rating on the stock.