ICICI Securities has reiterated a BUY call on Coforge Ltd, projecting robust double-digit earnings growth driven by aggressive artificial intelligence integration, operational discipline, and deep domain expertise across key verticals such as BFSI, healthcare, and travel and transport. The brokerage assigns a target price of Rs 2,300 per share, implying an upside potential of about 18 percent from the current market price of Rs 1,948, supported by a rich but justified valuation multiple of 38 times FY27 estimated earnings. The investment thesis rests on Coforge’s pivot toward AI-led platforms like Quasar and Code Insight AI, its expanding footprint across 25 countries with 33 delivery centers, and a strong track record of long-term client relationships that underpin revenue visibility. Despite a sharp rally post–second-quarter results, the house argues that earnings compounding, margin improvement, and a scalable AI-enabled operating model can sustain premium valuations. Risks stem from a potential global slowdown, rising subcontracting costs, currency headwinds, and execution challenges on large deals, but the broker believes these are manageable against the backdrop of improving return ratios and expanding addressable markets. For investors, the stock is positioned as a high-quality IT services compounder with a clear AI narrative, strong balance sheet, and improving cash flows, suitable for those with a 12- to 18-month horizon willing to tolerate valuation-related volatility.​

ICICI’s Stance: BUY with High-Conviction Upside

Recommendation and rating
ICICI Securities maintains a clear BUY recommendation on Coforge, framing the stock as a structural compounder within Indian mid-tier IT driven by AI-led transformation. The call is anchored on sustained revenue acceleration, improving profitability metrics, and the company’s ability to win and ramp up complex, large-scale deals.​

Target price and upside
The research house values Coforge at 38 times FY27 estimated earnings, arriving at a 12- to 18-month target price of Rs 2,300 per share, implying an upside of about 18 percent from the prevailing market price of Rs 1,948. This premium multiple is justified by strong earnings growth, improving return on equity and continued leadership in AI-enabled enterprise transformation.​

Key Trading Levels and Investor Strategy

Price levels to watch
The current market price of Coforge stands at Rs 1,948, with a 52-week range of Rs 1,191 to Rs 2,005, indicating the stock is trading close to its recent highs after a sharp post-result rally. The target price of Rs 2,300 thus represents a breakout thesis above the prior peak, requiring continued delivery on earnings and deal wins to sustain momentum.​

Suggested investment stance
For fresh investors, accumulation is advisable on dips closer to Rs 1,850–1,900, with a positional target of Rs 2,300 over 12–18 months. Existing investors can continue to hold with a medium-term perspective, using any meaningful correction driven by global risk-off sentiment as an opportunity to add.​

Time horizon and risk profile
The call is best suited for investors with a moderate to high risk appetite, given the elevated valuation and sensitivity to global IT spending cycles. A holding period of at least one year is recommended to fully capture the earnings compounding and AI-led margin expansion embedded in the forecasts.​

AI at the Core of Coforge’s Growth Story

Embedded AI across platforms
Coforge is systematically infusing AI across its service stack, shifting from decision support to AI-driven decision execution using platforms like Quasar (GenAI) and AgentSphere. With over 300 paid AI deployments and around 100 managed APIs, the company has moved beyond experimentation to scaled commercial adoption.​

Modernisation and automation engines
Tools such as Code Insight AI, BlueSwan and ForgeX are being deployed to reverse-engineer legacy code, accelerate modernization, and automate technology and BPO workflows. This integrated AI toolkit not only compresses project timelines but also de-risks complex upgrades, creating a compelling value proposition for large global clients.​

Operational Discipline and Margin Ambition

Global footprint and delivery muscle
Coforge now operates across 25 countries with 33 delivery centers, supporting a diversified client base and reducing geographical concentration risk. The company’s execution-heavy culture and sharp client-centricity have helped it scale high-quality business while sustaining operational control.​

Mission Zero and service reliability
The firm’s “Mission Zero” initiative, powered by Evolve Ops AI, targets zero-touch operations and zero disruption across client environments. This automation-led operating model has enabled more than 25 clients to run a full year without a P1 incident, materially strengthening its positioning as a reliable transformation partner.​

Profitability and margin trajectory
Management aims to sustain EBIT margins around 14 percent while using AI-driven efficiencies to further lift EBITDA margins over the medium term. The financial forecasts reflect this, with EBITDA margin expected to rise from 14.1 percent in FY25 to 16.6 percent in FY26 before stabilizing at 16.2 percent in FY27.​

Vertical Strength: BFSI, Healthcare and Travel

Healthcare and life sciences runway
The healthcare market served by Coforge is projected to expand from 177 billion dollars in 2025 to 244 billion dollars by 2029, offering a substantial growth runway. Coforge is focusing on AI-enabled member experiences, process automation, R&D optimisation, drug discovery and digital supply chains to monetise this opportunity.​

BFSI digital shift
In BFSI, the company is riding a decisive shift from traditional to fully digital models, driven by hyper-personalisation, embedded finance, digital payments, tokenisation and tighter regulatory compliance. A notable case involves a top 10 global bank where a niche low-code–no-code platform, first deployed in calendar 2020, has scaled at 30–40 percent annual growth through 2025, now spanning retail, corporate, wholesale and wealth businesses.​

Travel, transport and hospitality franchise
With three decades of experience in travel and transport, Coforge services roughly 60 airlines supported by more than 5,000 domain-certified engineers. Its strategy is to accelerate transformation via AI-enabled functional specialisation, simplified legacy modernisation and faster cloud migration across this vertical.​

Geographic Expansion and Strategic Alliances

West Coast opportunity
The U.S. West Coast currently contributes about 14 percent of Coforge’s revenue, but the region hosts 216 Fortune 1000 companies, representing a significant underpenetrated opportunity. The company is targeting high-potential verticals such as Hi-Tech, with an estimated 175 billion dollars of potential spend, and Retail/CPG with about 35 billion dollars of potential spend, using AI-led transformation as the entry wedge.​

Partnership-led growth
Strategic partnerships with Zscaler on SecureEdge2Cloud and with ServiceNow on Hi-Tech Deal Desk and RetailX Store Operations are designed to deepen access to large enterprise accounts. Case studies already show tangible benefits, such as a 10 percent sales uplift for a SaaS client, a 15 percent reduction in inventory costs and 30 percent waste reduction for a retail client, and a 30 percent boost in preventive maintenance revenue for a manufacturing customer.​

Financial Performance and Valuation Snapshot

Revenue and earnings trajectory
Net sales are projected to grow from Rs 12,051 crore in FY25 to Rs 16,147 crore in FY26 and Rs 19,345 crore in FY27, implying strong double-digit top-line growth. Adjusted net profit is forecast to rise from Rs 963 crore in FY25 to Rs 1,680 crore in FY26 and Rs 2,026 crore in FY27, driving EPS from Rs 29 to Rs 50 and then Rs 61 over the same period.​

Return ratios and balance sheet
Return on equity is expected to improve from 19.3 percent in FY25 to 23 percent in FY26, before moderating slightly to 22.4 percent in FY27, underlining healthy capital efficiency. The balance sheet remains strong, with shareholders’ funds projected to rise to over Rs 10,000 crore by FY27 and negligible net debt, giving Coforge ample flexibility for investments and potential inorganic moves.​

Valuation metrics
At the current market price, the stock trades at 39.3 times FY26 and 32.1 times FY27 earnings, with EV/EBITDA expected to compress from 37.9 times in FY25 to 23.2 times in FY26 and 19.1 times in FY27. While rich, these multiples are seen as sustainable given the growth profile, AI positioning and improving margin and return metrics.

Macro and demand risks
A pronounced slowdown or recession in major global economies could dampen discretionary IT spending, delaying project ramp-ups and impacting revenue visibility. BFSI and discretionary verticals would be particularly exposed in such a scenario, potentially softening growth versus current expectations.