By Q4, Coforge hopes to generate $2 billion in sales

Coforge has announced that it aims to reach $2 billion in annual revenue by the fourth quarter of the current financial year, according to its management at Investor Day.

After this announcement, several big brokerages released positive reports. They believe AI-based digital transformation, large deal wins, and focus on selected industries will help Coforge remain one of the fastest-growing IT services companies, even though overall demand in the IT sector is still uneven.

Coforge said that technology spending is changing, not reducing. However, analysts warned that client budgets may be tighter in 2026, especially for projects based on formal tenders (RFPs). Nuvama said companies that only depend on RFPs may struggle, while firms offering AI-led transformation have better opportunities.

ICICI Securities noted that AI automation is shortening project timelines, not cutting IT budgets. Coforge also repeated its long-term targets of at least 14% operating margin and 70% free cash flow conversion, though it will stop giving detailed financial guidance after FY27 to stay flexible.

Motilal Oswal maintained a “Buy” rating, saying Coforge’s strong order book and steady client spending support growth, and it sees up to 54% upside in the stock. Nuvama also expects strong growth due to deal wins. Coforge has already secured 10 large deals in the first half of FY26 and plans to close 20 deals this year, compared to 15 last year.

The company expects to complete its Cigniti acquisition soon, which analysts believe will improve earnings and strengthen its software testing business. Some brokerages estimate this merger could add around 5% to earnings per share.

Despite positive brokerage views, investors reacted cautiously. Coforge shares fell 4% to ₹1,873.40 on the BSE. Analysts warned that in the current market, maintaining the 14% margin target could be challenging, even if margins improve over time.