Coforge Limited

Technology — Information Technology Services · NSE

₹1,951.90+₹17.60 (+0.91%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Coforge Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Coforge Limited provides information technology (IT) and IT-enabled services in India, the Americas, Europe, the Middle East and Africa, Latin America, and the Asia Pacific.

IndustryInformation Technology Services

SectorTechnology

Employees26,932

Annual revenue₹16,391 Cr

How does it make money?

Turns over ₹16,391 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 26,932 employees supports ₹60.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹60.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What is the outlook?

30 analysts covering the stock expect revenue to grow about 15.2% and earnings to grow about 21.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.2%

Est. earnings growth+21.6%

Analysts30

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +105% while net margin moved +10% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+105%

Margin effect+10%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 40.0x already prices in growth
✓ P/E is 29% below its own historical median of 56.5x — cheap by its own standards
✗ P/B of 6.87x is a steep premium to book

Quality vs. Valuation

Company Quality

70/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

46/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

40.0x

3Y Median

56.5x

40 monthly readings · mean 57.0x · range 38.1x–78.2x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 29% below its 3y median of 56.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 142% above the peer median of 16.5x.

vs. its own history

Cheap

56.5x median over 40 months · -29%

vs. sector peers

Expensive

16.5x median of 4 peers · +142%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

29.1x

PEG

1.29

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 32% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 22.5% to 16.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.1% to 18.6% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 7.52x — earnings must service borrowings before shareholders see anything.
🟡Debt is increasingFinancial
Total debt is up 29% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 146% against revenue up 105% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.6% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Priced below its own history
The stock trades 29% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 7.52x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 146% against revenue up 105%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 142% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 22.5% to 16.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 20% a year✓ 26.9% CAGR
Latest reported year was 49.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 18.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1,049 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✗ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹86,477 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

40.0x

Fair

Fairly valued against the generic band

P/B Ratio

6.87x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹48.83

Profitable

Profitable on a per-share basis

ROE

16.3%

Strong

Strong capital efficiency

ROCE

18.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

7.52x

High

High leverage

Revenue Growth (YoY)

49.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

30.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.82%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹1,049 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

27.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

16.0%

Good

Healthy core-business profitability

Net Margin

9.6%

Average

Average bottom-line conversion

Current Ratio

1.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

93%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

1833.8 / 1853.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

70.4

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹8,015 Cr	₹9,009 Cr	₹12,073 Cr	₹16,391 Cr	+26.9%
EBITDA	₹1,340 Cr	₹1,509 Cr	₹1,860 Cr	₹2,955 Cr	+30.2%
EBITDA Margin	16.7%	16.7%	15.4%	18.0%	—
PAT (Net Profit)	₹694 Cr	₹808 Cr	₹812 Cr	₹1,556 Cr	+30.9%
EPS	₹22.31	₹25.92	₹24.41	₹45.9	+27.2%
ROE	22.5%	22.3%	12.7%	16.3%	—
ROCE	26.1%	26.0%	14.7%	18.6%	—
Total Debt	₹562 Cr	₹726 Cr	₹1,070 Cr	₹728 Cr	+9.0%
Free Cash Flow	₹792 Cr	₹638 Cr	₹623 Cr	₹1,049 Cr	+9.8%

🟢 Revenue has grown at 26.9% a year over 3 years.

🟢 EBITDA has grown at 30.2% a year over 3 years.

🟢 EBITDA Margin has risen from 16.7% to 18.0% over 3 years (+1.3 pts).

🟢 PAT (Net Profit) has grown at 30.9% a year over 3 years.

🟢 EPS has grown at 27.2% a year over 3 years.

🔴 ROE has fallen from 22.5% to 16.3% over 3 years (-6.2 pts).

🔴 ROCE has fallen from 26.1% to 18.6% over 3 years (-7.4 pts).

🔴 Total Debt has grown at 9.0% a year over 3 years.

🟢 Free Cash Flow has grown at 9.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,881 Cr

Total Liabilities

₹5,201 Cr

Cash & Equivalents

₹1,094 Cr

Operating Cash Flow

₹1,792 Cr

Capex

-₹743 Cr

Shareholding (proxy)

Institutional Holding

60.0%

Insider Holding

21.3%

Corporate Actions

Next Earnings

23 Oct 2026

Dividend Rate

₹16

Ex-Dividend Date

03 Aug 2026

Analyst Consensus

Recommendations

30 Buy · 1 Hold · 4 Sell

Target Price (Mean)

₹2,017.49

+3.4% vs CMP

Target Range

₹1,236 – ₹2,870

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

1 positive1 mixed4 general

Coforge Ltd is Rated Buy by MarketsMOJO

MarketsMojo, 03 Sept

COFORGE Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Coforge surges 31% in 4 weeks, hits 8-month high; what's driving IT stock?

Business Standard, 20 Aug

Coforge shares advance 2% as board appoints Akhil Gupta as Chairperson; key details to know

Upstox, 29 Sept

Is It Smart To Buy Coforge Limited (NSE:COFORGE) Before It Goes Ex-Dividend?

Simply Wall Street, 31 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Stocks To Buy Today: Coforge, Timex To Glenmark Pharma — Five Stock Picks By Motilal Oswal's Chandan Taparia

NDTV Profit, 31 Aug

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Profitability · Valuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑