Coforge shares have returned more than 1,200 percent during the last decade. The multibagger stock has gained over 320 percent in the previous five years and has recovered more than 48 percent from its 52-week low of Rs 3,753.85, set on April 17, 2023. It rose about 3% to an intraday high of Rs 5703.4.
Sharekhan met with Coforge management to receive an update on the company's outlook and growth goals from QIP. Coforge plans to raise Rs 3,200 crore. The QIP proceeds of Rs 3,200 crore would be used solely for mergers and acquisitions (M&A).
"The inorganic pursuits would aid the company in acquiring horizontal capability, forging partnerships/alliances and expansion in existing verticals or building new verticals . However, the size and margin profile of the target company would provide clarity whether the M&A would be earning per share (EPS) accretive or dilutive," it added.
According to Sharekhan, the company has consistently succeeded in recent quarters despite a challenging environment, and it is confident of meeting the lower end of the forecast range for FY24. The large order book of $974 million gives strong revenue visibility, while margin levers could help margins increase in FY25.
It anticipates a sales/PAT CAGR of 17/32 percent for FY24-26. Sharekhan maintains a 'Buy' recommendation on Coforge with an unchanged target price of Rs 7,670, believing the business is well positioned to deliver top quadrant performance in FY25 due to its solid order book, sustained high order intake, and significant deal pipeline.
About Coforge
Coforge Limited is an India-based information technology (IT) solutions provider. It specializes in in-app development and maintenance, managed services, cloud computing, and business process outsourcing. The company offers computer programming consulting and related services. Its geographical segments include Americas, Europe, Middle East and Africa (EMEA), Asia Pacific (APAC), and India.
