Over 1,200% Return in 10 Years! Here’s Why Sharekhan Sees 38% Potential Upside in Coforge Shares
Sharekhan met Coforge’s management to get an update on the company’s outlook and growth plans from QIP. Coforge is looking to raise funds to the tune of Rs 3,200 crore. The QIP proceeds of Rs 3,200 crore would be purely utilised for mergers and acquisitions (M&A) purposes.
Shares of Coforge have delivered over 1,200 per cent return in the last 10 years. The multibagger stock is up over 320 per cent in the last 5 years and has recovered over 48 per cent from its 52-week low of Rs 3,753.85, hit on April, 17, 2023. It jumped around 3 per cent to hit an intraday high of Rs 5703.4.
“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 performed during last several quarters despite challenging environment and is confident of achieving the lower end of the guided range for FY24. The robust order book at $974 million provides strong revenue visibility while margin levers should aid margin uptick in FY25.
It expects sales/PAT CAGR of 17/32 per cent over FY24-26. Sharekhan has maintained a ‘Buy’ rating on Coforge with unchanged target price of Rs 7,670 as the company is well placed to deliver top quadrant performance in FY25 given the robust order book, consistent strong order intake and large deal pipeline.
About Coforge
Coforge Limited is an India-based information technology (IT) solution company. It is engaged in the in-application development and maintenance, managed services, cloud computing and business process outsourcing.
The company provides computer programming consultancy and related activities. Its geographical segments include Americas, Europe, Middle East and Africa (EMEA), Asia Pacific (APAC), and India.
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