Coforge shares fall nearly 3% despite higher broker targets

Coforge shares fell nearly 3% to Rs 1,844 in morning trading on October 26, 2026, despite brokerages raising price targets after its second-quarter results. Their optimism centered on stronger margins, a larger signed order book and higher earnings expectations, although Jefferies said quarterly revenue missed its forecast.

Key Takeaways

• Quarterly net profit rose 56.5% year on year to Rs 588.1 crore.
• Coforge raised FY27 EBIT margin guidance to 16% from 15.5%.
• Jefferies, Nomura and Motilal Oswal retained Buy ratings and increased price targets.

Table of Contents

• Coforge shares retreat after a strong earnings update
• Why brokerages raised their targets
• Orders and margin guidance underpin the outlook
• Conclusion

Coforge shares retreat after a strong earnings update

Coforge’s Q2 FY27 results announcement, released on October 23, covered the quarter ended September 30, 2026. Revenue rose 53.6% year on year to Rs 6,170.8 crore, while EBITDA increased 67.3% to Rs 1,269.7 crore.

The EBITDA margin expanded by 168 basis points to 20.6%. Profit grew faster than revenue, showing that the increase in business was accompanied by improved profitability.

The subsequent share-price decline contrasted with the brokers’ more favorable assessments. The available information does not establish why the stock fell, and the Rs 1,844 price was a morning trading level rather than a closing price.

Why brokerages raised their targets

Jefferies said September-quarter revenue fell short of its expectations, but margins exceeded estimates. It pointed to 7% sequential growth in the executable order book, a strong deal pipeline and an improved margin outlook as support for its Buy rating.

Nomura raised its FY27–FY28 earnings-per-share estimates by 5%–7%, incorporating the quarterly results and higher margin assumptions. It retained Coforge as its preferred mid-cap Indian IT services stock.

Motilal Oswal said the order book supported faster growth in the second half of FY27. The brokerage cited deal wins, execution, improving cash conversion and the upgraded margin outlook as reasons for its positive assessment.

The revised targets below are brokerage assessments, not company guidance or assured future trading prices.

Orders and margin guidance underpin the outlook

Coforge’s signed order book executable over the next 12 months reached $2.38 billion, up 45% from a year earlier. Quarterly order intake totaled $1.04 billion, and the company signed eight large deals—the highest number it has recorded in a single quarter.

Chief Executive Officer Sudhir Singh raised the full-year FY27 EBIT margin forecast to 16% from 15.5% and said management expected 17% in the following fiscal year. The September quarter’s actual EBIT margin was 16%, distinct from its higher EBITDA margin.

The release also showed organic constant-currency revenue growth of 3.8% from the previous quarter. That measure provides a separate view of underlying expansion from the much larger reported year-on-year revenue increase.

Conclusion

For Coforge shares, the next operating benchmark is delivery against the signed order book and the raised 16% FY27 EBIT margin guidance. The higher brokerage targets reflect confidence in that outlook, not a guarantee that the stock will follow.

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