COFORGE LIMITED (COFORGE)
Coforge | FY26 annual report and Q2 FY27 results | 6–12 month research watchlist
Investment Read
Evidence-led 6–12 month research view; 23 Oct EOD setup and 26 Oct document review.
Strong execution; acquisition accounting makes the next two quarters decisive.
Coforge reported Q2 FY27 revenue of ₹6,170.8 Cr (+53.6% YoY), EBIT margin of 16.0%, and profit attributable to shareholders of ₹588.1 Cr (+56.5% YoY). Its next-12-month executable order book was $2.38bn (+45% YoY). These are company-reported consolidated figures. Q2 presentation
The headline 53.6% revenue growth includes Encora. Management disclosed organic constant-currency growth of 3.8% sequentially, while Encora's roughly $147–148m Q2 revenue was flat against its full-quarter Q1 run rate. The key test is whether the enlarged business can sustain organic growth and reduce acquisition debt. Q2 call transcript
Decision frame
- Thesis: large deal conversion and 16% EBIT margin sustain cash earnings.
- Entry: Friday's Stage 2 screen merits monitoring; no confirmed price breakout is asserted.
- Invalidation: organic growth fades, Encora misses integration goals, or cash conversion weakens while debt stays high.
- Valuation: no defensible target until post-acquisition earnings and share count normalize.
Fundamental Scores
Agent Adda scores from snapshot (stage_snapshot). Useful ranking signals — not standalone buy/sell rules.
Score Interpretation
The fundamental score of 77.5 is an internal ranking output. Earnings quality (63.6) trails sales growth and financial strength (both 85.0); the 98.0 investment score also reflects strong technical inputs. Verify cash flow, Encora integration, leverage and dilution before treating either score as conviction.
Company Overview
Business facts from the FY26 annual report and Q2 FY27 presentation; strategy language remains a management claim.
What it sells
Digital engineering, data, cloud, AI-led engineering, intelligent automation and business-process services. Coforge focuses on banking, insurance, travel and related industries. Its FY26 annual report describes domain-specialist delivery as its model.
Client and geographic mix
In Q2 FY27, banking and financial services were 25.3% of revenue, insurance 20.2%, and travel/transport/hospitality 17.6%. Americas were 63.1%. Top 10 clients contributed 26.4% of revenue, so large-account execution matters.
Moat test
Management cites deep domain knowledge, large deals, AI engineering and a 95.5% repeat-business ratio. The investment test is whether these claims produce recurring organic growth, stable margins and free cash flow after the Encora integration.
Website Research: Products, Customers and Moat Evidence
Verified company materials; customer outcomes are management-reported.
Offerings
The FY26 annual report describes Coforge Quasar, Forge-X and CodeInsightAI as delivery accelerators alongside engineering, cloud, data and AI services. Q2 materials group AI-led engineering, data/integration and cloud at 86% of consolidated revenue.
Commercial evidence
Q2 FY27 presentation: eight large deals, $1.04bn fresh order intake and $2.38bn next-12-month executable book. These are stronger evidence of demand than product-marketing copy; future revenue and margin conversion still need verification.
Historical P&L
Consolidated, ₹ Cr. FY24 from normalized Screener history; FY25–FY26 from the FY26 annual report's restated comparison.
| Fiscal year ended March | Revenue | PAT attributable to shareholders | Read-through |
|---|---|---|---|
| FY24 | 9,009 | 836 | Screener history; verify against FY24 filing for strict comparability |
| FY25 | 12,073.3 | 963.5 | FY26 annual-report comparative |
| FY26 | 16,402.7 | 1,674.5 | Revenue +35.9%; attributable PAT +73.8% YoY |
Quarterly Results
Official consolidated company presentation; ₹ Cr except EPS. Profit is after non-controlling interest.
| Metric | Q2 FY26 | Q1 FY27 | Q2 FY27 | Q2 YoY |
|---|---|---|---|---|
| Revenue | 4,016.4 | 5,527.7 | 6,170.8 | +53.6% |
| EBITDA | 758.8 | 1,123.3 | 1,269.7 | +67.3% |
| EBIT margin | 14.6% | 16.0% | 16.0% | +134 bps |
| PAT attributable to shareholders | 375.8 | 518.6 | 588.1 | +56.5% |
| Basic EPS (₹) | 11.2 | 12.3 | 13.3 | +18.3% |
Balance Sheet And Cash Flow
Official consolidated Q2 FY27 balance sheet and cash-flow presentation; quarter ended 30 Sep 2026.
| Balance-sheet item (₹ Cr) | Sep 2025 | Sep 2026 |
|---|---|---|
| Borrowings | 608.2 | 5,645.7 |
| Cash and equivalents | 517.8 | 1,821.7 |
| Net borrowings less cash | 90.4 | 3,824.0 |
| Goodwill | 4,113.4 | 16,535.4 |
| Acquired intangible assets | 1,294.4 | 5,603.6 |
| Net worth | 8,922.5 | 22,536.7 |
| Cash-flow item (USD m) | Q2 FY26 | Q2 FY27 |
|---|---|---|
| Operating cash flow | 47.2 | 56.0 |
| Free cash flow | 37.5 | 53.8 |
| Net working-capital outflow | 31.3 | 51.4 |
| Free cash flow / PAT | 86% | 89% |
Concall, Filings And News
Three official earnings calls reviewed: Q4 FY26 (5 May), Q1 FY27 (28 Jul), Q2 FY27 (23 Oct). Reported results are separated from management expectations.
| Call | Management position at the time | Read-through after Q2 FY27 |
|---|---|---|
| Q4 FY26 | Set FY27 combined EBIT margin guidance at 15.5% and FCF/PAT ambition above 100%. FY26 PAT included a one-time, non-cash ₹181 Cr deferred-tax-liability reversal from the Cigniti merger. | FY27 H1 EBIT margin is 16.0%, ahead of the initial guide. H1 FCF/PAT is 92%, below the full-year 100% goal; the tax benefit means reported FY26 PAT growth needs normalization. |
| Q1 FY27 | Two months of Encora contributed $100.7m. Reported combined EBIT margin reached 16.0%. Management disclosed 5.2% sequential CC growth after excluding planned business exits, and guided to $15–16m total integration costs. The $550m acquisition term loan was fully drawn. | Q2 again delivered 16.0% EBIT margin. Encora's approximately $147–148m Q2 revenue was flat versus its full-quarter Q1 run rate. Integration spending reached about $17m by Q2, slightly above the earlier range. |
| Q2 FY27 | Raised FY27 combined EBIT margin guide to 16.0% and targeted a 17.0% Q4 exit. Reported organic CC growth was 3.8% sequentially; free cash flow was $53.8m, or 89% of PAT. Management expects Encora growth to match the core business from Q3. | Margin delivery and order intake improved; the Encora growth acceleration, 100% FCF/PAT full-year goal, and debt reduction remain unproven and should be tested in Q3/Q4 filings. |
Filings And Documents
Direct company-hosted primary documents, reviewed 26 Oct 2026.
| Document | Date | Evidence used |
|---|---|---|
| FY26 annual report | FY ended 31 Mar 2026 | Business, history, DSO, capital allocation and risk disclosures |
| Q2 FY27 result filing | 23 Oct 2026 | Consolidated and standalone results; unmodified limited review |
| Q2 investor presentation | 23 Oct 2026 | Revenue, attributable PAT, mix, orders, debt and cash flow |
| Q2 call transcript | 23 Oct 2026 | Organic/Encora growth reconciliation and management outlook |
FY26 Annual Report Read-Through
Coforge-hosted FY2025–26 annual report, 182 PDF pages; reviewed against Q2 FY27 for acquisition changes. Open annual report.
Business and customers
The report describes a domain-led IT services model spanning banking, insurance and travel with engineering, data, cloud and AI capabilities. Its cited client-retention and platform claims are management evidence; the test is repeat revenue and cash conversion. Q2 FY27 top-10 clients accounted for 26.4% of revenue.
Financial and capital allocation
FY26 consolidated revenue rose 35.9% to ₹16,402.7 Cr; attributable PAT was ₹1,674.5 Cr. Billed DSO increased from 60 to 69 days, while the annual report listed FY26 short-term borrowing of ₹283 Cr and a 0.04 debt/equity ratio. This is a pre-Encora balance sheet; September 2026 borrowing was ₹5,645.7 Cr. The report also records ₹15.8 per share of FY26 interim dividends.
Sector And Competitive Context
Relative strength is from the 23 Oct Agent Adda EOD screen; no same-date peer valuation table was supplied.
Coforge ranked in Stage 2 with approximately 97th-percentile relative strength versus the Nifty 500 in Friday's Agent Adda screen. Nifty IT had positive one-month relative strength, although it remained sensitive to the broader market. No peer ranking or “cheapest IT stock” claim is made without comparable latest-quarter and acquisition-adjusted data.
Equity Chart V1
EOD chart from PostgreSQL market.equity_eod (130 bars). Range: 2026-04-22 → 2026-10-23.
Technical Analysis
Agent Adda EOD indicators as of 23 Oct 2026; price and signals may have changed.
| Indicator | Value | Note |
|---|---|---|
| Stage | Stage 2 | Weinstein stage |
| Signal | — | Snapshot |
| RSI | 60.66 | Momentum |
| ADX | 23.7 | Trend strength |
| SMA20/50/200 | 1856.06 / 1863.23 / 1527.65 | Trend context |
| Supertrend | SELL | Trend filter |
| Ratio | Value |
|---|---|
| Market cap | INR 84,711 Cr |
| P/E | 39.0x |
| ROCE | 23.5% |
| ROE | 21.4% |
| Book value | INR 505 |
| High / Low | 2021.2 / 1008.1 |
| Dividend yield | 0.64% |
Weinstein And O'Neil Read
Stan Weinstein Stage Analysis
The snapshot labels the stock Stage 2 (Stage 2 uptrend). Weinstein stage describes the position of price within a multi-month trend: Stage 1 is a base, Stage 2 an advance, Stage 3 a topping range, and Stage 4 a decline. It is a context framework, not a forecast or standalone trade signal.
Evidence check: price is above the 20/50/200-day averages, and the moving averages are not fully stacked bullishly (1856.06 / 1863.23 / 1527.65). RSI is 60.66 (constructive momentum); ADX is 23.7 (limited trend strength); Supertrend is SELL. A bullish stage with weak momentum, a broken moving-average stack, or a conflicting Supertrend reading is a lower-quality setup.
William O’Neil / CAN SLIM Lens
- C — Current earnings: Q2 FY27 shareholder-attributable PAT rose +56.5% and revenue grew +53.6% (including Encora); confirm the next two quarters and check whether margin and CFO support the growth.
- A — Annual earnings: FY26 revenue grew +35.9% and attributable PAT +73.8%; the Encora step change begins in FY27.
- N — New: identify a new product, customer, capacity addition, or catalyst and distinguish company guidance from delivered results.
- S — Supply/demand: price/volume confirmation matters; share issuance, promoter selling, or thin liquidity can weaken the setup.
- L — Leader: the 23 Oct internal EOD scan placed the stock near the 97th percentile versus Nifty 500; verify persistence against Nifty IT and the wider market.
- I — Institutions: institutional-bias score is 92.00; verify actual ownership trend.
- M — Market: confirm that the broader index and sector are supportive.
Practical conclusion: watchlist-quality setup only when earnings acceleration, leadership, volume, and a definable risk point align.
Broker And Market View
Same-date, split-adjusted broker consensus was not verified.
No broker target or consensus is used. Older price snippets can predate Coforge's share split or recent results and are unsuitable for a current valuation comparison. Use the official result, annual report and current exchange quote for further review.
Valuation Scenarios
Qualitative cases; no price target is asserted while acquisition-adjusted earnings and share count are unsettled.
| Case | What must happen | What to measure | Valuation implication |
|---|---|---|---|
| Bear | Encora growth stays flat and organic demand slows. | Organic CC growth, interest burden, receivables and debt. | Earnings and multiple both at risk. |
| Base | Order book converts while 16% EBIT margin and cash conversion hold. | Revenue conversion, FCF/PAT and net borrowings. | Current premium requires delivery. |
| Bull | Encora growth matches core operations and debt falls. | Per-share earnings, organic growth and deleveraging. | Stronger earnings may justify a premium. |
Issues And Risks
Company-specific risks tied to the annual report and Q2 FY27 disclosures.
| Risk | Evidence | Monitor |
|---|---|---|
| Acquisition-led growth | First full Encora quarter; reported +53.6% YoY versus +3.8% organic CC QoQ. | Separate organic and Encora run rates each quarter. |
| Debt and interest | Sep 2026 borrowings ₹5,645.7 Cr; Q2 net interest expense ₹83.6 Cr. | Debt, interest cover and FCF-funded repayment. |
| Goodwill and integration | Goodwill ₹16,535.4 Cr plus acquired intangibles ₹5,603.6 Cr. | Impairment indicators and achieved synergies. |
| Collections and credit | FY26 billed DSO 69 versus 60; Q2 bad-debt provision ₹30.2 Cr versus ₹2.2 Cr. | DSO, receivables, unbilled revenue and cash conversion. |
| Dilution and valuation | Q2 PAT +56.5% YoY but EPS +18.3%; trailing P/E basis is changing. | Shares outstanding, per-share earnings and normalized valuation. |
| Demand, talent and cyber | Annual report flags global delivery and data/security exposures. | Large-deal conversion, attrition and disclosures. |
Evidence Trail
Primary documents first; EOD technicals are Agent Adda's 23 Oct snapshot.
- Coforge FY26 annual report — business, audited financials, DSO, capital allocation and risks.
- Q2 FY27 result filing — consolidated and standalone results and limited-review statement.
- Q4 FY26 earnings-call transcript — initial FY27 guidance, FY26 tax benefit and cash flow.
- Q1 FY27 earnings-call transcript — Encora integration, financing and first-quarter delivery.
- Q2 FY27 investor presentation — profit bridge, balance sheet, cash flow, revenue mix and order book.
- Q2 FY27 earnings-call transcript — Encora and organic growth reconciliation; management outlook.
- October 23 company release — quarterly headline figures and guidance.
- Screener consolidated history — normalized ratios, with period and NCI caveats.
- NSE quote and exchange disclosures.