Coforge Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Coforge Ltd trades at ₹1,784, in a confirmed uptrend and 8 weeks into that stage. That is +11.3% against its own 200-day average. It sits at 75% of a 52-week range of ₹1,089 to ₹2,015. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 24 straight weeks.

Today the stock is in a confirmed uptrend — week 8 of stage 2, confirmed. At ₹1,784 it trades +11.3% versus its 200-day average and sits at 75% of its 52-week range (₹1,089–₹2,015).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +1,829% while the NIFTY 500 moved +262% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 24 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Coforge Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: EXPANSION_STARTED. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. Coforge is executing an acquisition-fueled scale reset via Encora and Cigniti, transitioning 86% of revenue into AI-led engineering, data, and cloud services while expanding consolidated operating margins toward 19-20%.

What is proven. Coforge is executing an acquisition-fueled scale reset via Encora and Cigniti, transitioning 86% of revenue into AI-led engineering, data, and cloud services while expanding consolidated operating margins toward 19-20%.

What is not proven yet. Consolidated EBIT margin dropping below 14.5% for two consecutive quarters, combined with Encora quarterly organic revenue growth decelerating below 5% YoY and order book conversion multiple falling below 1.1x, would invalidate the thesis.

🚨 What would change our mind. Consolidated EBIT margin dropping below 14.5% for two consecutive quarters, combined with Encora quarterly organic revenue growth decelerating below 5% YoY and order book conversion multiple falling below 1.1x, would invalidate the thesis.

Layer 1 read, 22 August 2026 — KEEP. Five promises made, five delivered — the overhead saving is permanent and the cash is real. Coforge is the one name here where what management said and what arrived line up on every count: five tracked promises, none missed, two beaten. The engine is simple to state — sales up 49.2% to Rs 5,528 crore, a signed order book of $2.2 billion for the next twelve months, up 44.2%, and combined head-office costs cut from 10.0% to 6.6% of sales after absorbing Encora, which is a permanent saving rather than a good quarter. Over three years the business banked Rs 1.12 of cash for every rupee of reported profit. What I will not lean on is the price tag: the bundle carries three different earnings multiples for this stock and the trailing profit includes roughly Rs 191 crore of one-off tax…

What would change Layer 1’s mind. Consolidated operating margin falling below 15.5% in any FY27 quarter while combined overheads climb back above 8.5% of revenue — that pairing would say the Encora saving was a timing effect rather than a permanent removal of cost, and the overhead leg is the single load-bearing plank of this verdict. A second breaker is quarterly organic order intake dropping under $500 million, since the $2.2 billion executable book is what buys the next four quarters of revenue.

Layer 2 read, 22 August 2026 — ADVANCE. Coforge's execution survives the external test, while AI contract economics remains the key watch. The external checks support L1: Coforge is named as a stronger mid-cap IT executor, and fresh stock commentary confirms revenue and margins rising together. The $2.2 billion order book and lower overhead are hard facts, while the high historical margin percentile is only a model read. AI repricing remains the specific external risk.

What would change Layer 2’s mind. A verified finding that AI savings are being passed back through rate cuts or unprotected token costs, with consolidated EBIT below 14.5% for two quarters and Encora organic growth below 5%, would flip ADVANCE to DROP.

Layer 3 read, 22 August 2026 — DEPLOY. Management has delivered every tracked promise, and Encora's cost savings are already visible. All five tracked promises are met, beaten or on plan, while the executable order book is $2.2 billion. Timeline R1's acquisition risk is real, but targeted evidence says integration is ahead of plan, and combined overhead has already fallen from 10.0% to 6.6%. The AI-pricing social lead remains unanswered at contract level, so deployment is sized at 3.0%, not the maximum.

What would change Layer 3’s mind. Combined G&A above 8.5% of revenue in the next reported quarter would show that Encora's cost removal was temporary and flip DEPLOY to BENCH or DROP.

CIO read, 22 August 2026 — BENCH. NOT ADMITTED (incoming, benched) · forward-asymmetry 60/100 · CONTESTED. The order book and permanent cost saving support judged EPS growth of 21.0%, but that is below the model-implied 23.5%, a derived -2.5-point gap. Cash conversion is strong, but a 64.4% four-month price rise has left the shares only 4% below their peak, so this remains a boundary fight despite the DEPLOY regime.

The test written in advance. Consolidated EBIT margin dropping below 14.5% for two consecutive quarters, combined with Encora quarterly organic revenue growth decelerating below 5% YoY and order book conversion multiple falling below 1.1x, would invalidate the thesis. — the thesis as written as stated by the next result.

The test written in advance. Equity Dilution and Integration Execution Drag — Equity Dilution and Integration Execution Drag Consolidated EPS growing slower than 15% YoY or quarterly Encora revenue declining sequentially. by the next result.

The test written in advance. Margin Compression from 93rd Percentile Peak Levels — Margin Compression from 93rd Percentile Peak Levels Consolidated EBIT margin dipping below 15.5% in any quarter during FY27. by the next result.

🚨 What the surface reading misses. The surface reading is: Equity base expanded 25.0% causing EPS dilution risk. The research reads it further: Encora brings scaled product engineering and $101M bi-monthly revenue at 20.3% EBITDA margin; the all-stock deal structure preserved liquidity while fixed-rate debt funded the cash component.

🚨 What the surface reading misses. The surface reading is: Acquisitions in IT typically suffer initial margin compression due to integration friction. The research reads it further: Day-one unified S4 HANA ERP cut duplicate corporate overhead, reducing combined G&A by 340 bps to 6.6% and generating immediate operating leverage.

Lever 6 · Order-book wins — BUILDING. 12-month executable order book reached an all-time peak of $2.2 billion (+44.2% YoY) alongside $691M Q1 organic intake. What proves it keeps working: Executable Order Book and Large Deal Momentum. It stops working if Order intake drops below $500 million per quarter or deal conversion cycles stretch beyond 9 months.

Lever 1 · Operating leverage — BUILDING. Discontinuation of low-margin India government business and quiet automation drive OPM toward 19.0-20.0%. What proves it keeps working: Operating Leverage and Portfolio Rationalization. It stops working if Wage inflation exceeding 8% coincides with bench utilization falling below 78%.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Coforge Ltd reported ₹5,528 Cr of revenue in the Jun 26 quarter, +49.2% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 19.8% a year. The last full year, FY26, came in at ₹16,403 Cr. The last four reported quarters add to ₹18,196 Cr.

Why this happened. Coforge is actively executing The Value Chain Climb mental model. High-margin services now dominate the mix: engineering at 50%, data at 21%, and cloud at 15%. Deployment of the proprietary Neuron operating layer across 100+ reusable agents and hybrid Mod Squad delivery architectures has driven 35% to 50% effort efficiency gains, enabling Coforge to secure outcome-based and risk-reward contracts that account for 6.0% to 7.0% of consolidated revenue.

FY26 revenue came in at ₹16,403 Cr (+35.9% on the year), capping 10 years at 19.8% compound. The latest quarter (Jun 26) printed ₹5,528 Cr, +49.2% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +35.2% growth against the decade's 19.8% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +35.7% over the last 4 quarters against +40.1%/yr over the last 8 — rolling over; TTM profit +66.5% vs +55.0%/yr — accelerating.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Coforge Ltd's operating margin is 19.0% in the Jun 26 quarter, +3.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged 14.0% to 18.0%. The current quarter is running above every full year in that window.

Why this happened. Encora closed on April 24, 2026 and contributed $101 million in revenue during its first two months of consolidation. The acquisition expands Coforge's equity base by 25.0% and establishes digital product engineering scale. Day-one leadership integration and migration of 45 legal entities to S4 HANA reduced combined G&A from 10.0% to 6.6%, generating operational cost synergies that support FY27 consolidated EBITDA margin guidance of 20.5% to 21.0%. Citing the mental model M&A as Earnings Accelerator in Mid-Small Caps, upfront commercial diligence and rapid operational consolidation prevent integration drag.

The latest quarter's operating margin is 19.0%, +3.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 14.0%–18.0%, and FY26's 18.0% is the top of that band — a record year.

Why the margin moved: operating margin went +3.6 pp year on year while gross margin went +0.0 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Coforge Ltd earned ₹532 Cr of net profit in the Jun 26 quarter, +49.4% year on year. It is the 8th consecutive quarter of growth. Full-year FY26 profit was ₹1,745 Cr. The 10-year compound rate is 19.8%. That is 9.6% of the quarter's revenue. The same quarter a year earlier earned ₹356 Cr.

Jun 26 profit was ₹532 Cr, +49.4% year on year — the 8th consecutive quarter of growth. On the full year, FY26 printed ₹1,745 Cr (+86.4%), and the 10-year compound rate is 19.8%.

Why profit moved: revenue contributed +49.2% and the margin +3.0 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +66.0% vs revenue +35.2%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 112% of Coforge Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹1,792 Cr of operating cash against ₹1,745 Cr of profit. After ₹1,347 Cr of capital spending, ₹445 Cr was left as free cash.

FY26: operating cash of ₹1,792 Cr against reported profit of ₹1,745 Cr, leaving free cash of ₹445 Cr after ₹1,347 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 112% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 112%: the cash cycle held roughly steady between FY21 and FY26 — so conversion tracks profitability rather than the cycle.

Router verdict: the bigger cash user is investment — capital spending ran 4.2× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Coforge Ltd's cash conversion cycle runs 88 days in FY26, up from 84 days in FY21. Capital spending ran ₹5,853 Cr over the last 3 years. At FY26 sales of ₹16,403 Cr each day of that cycle holds about ₹44.9 Cr, so roughly ₹3,955 Cr sits inside the business at any moment.

FY26: debtors at 88 days (an asset-light business — no inventory to speak of) — for a full cycle of 88 days, looser than FY21's 84.

In money terms: at FY26 sales of ₹16,403 Cr, each day of the cycle holds about ₹44.9 Cr — so the 88-day loop keeps roughly ₹3,955 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹5,853 Cr over the last 3 fiscal years against ₹1,407 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹3.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Coforge Ltd earns a ROCE of 24% in FY26. That is up from a trough of 19% in FY15. Return on invested capital clears the cost of that capital by +13.5 percentage points, so growth here adds value rather than only size. The wiring behind it is 10.6% net margin on 1.10× asset turns.

FY26 ROCE is 24%, recovered from a FY15 trough of 19% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 10.6% net margin × 1.10× asset turns × 1.56× balance-sheet leverage ≈ 18.2% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 25.5% − 12.0% = a +13.5 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Coforge Ltd carries total debt of ₹728 Cr against shareholder equity of ₹9,681 Cr as of Mar 26, a debt-to-equity of 0.08 — effectively unlevered. On the annual view that ratio went from 0.17 in FY22 to 0.08 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹728 Cr against shareholder equity of ₹9,681 Cr — a debt-to-equity of 0.08. On the annual view, debt-to-equity went from 0.17 (FY22) to 0.08 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions cut 17.8 points of Coforge Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 24.3% of the company. Domestic institutions moved −5.5 points over the same window, to 42.6%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −17.8 points over 8 quarters to 24.3%; Domestic institutions: −5.5 points over 8 quarters to 42.6%; Promoters: +0.0 points over 8 quarters to 0.0%. Note the structure: promoters hold under 20% — this is a widely-held company where institutions, not a family, set the direction.

🚨 Why the register moved: foreign institutions drove it (−17.8 points), alongside domestic institutions (−5.5 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Coforge Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Coforge Ltd trades at 41.2× P/E, mid-range by its own standards (68th percentile). Its long-run median P/E is 31.3×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 41.2× is mid-range by its own standards (68th percentile), against a long-run median of 31.3× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +90.7% against a +16.0% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +9.6%/yr price move, ~+26.4%/yr came from earnings growth and ~−16.8 pp from the multiple (compressing); over 10y, of the +35.4%/yr price move, ~+19.8%/yr came from earnings growth and ~+15.6 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 26 August 2026 price, Coforge Ltd was paying for profit growth of about 23.5% a year. Profit itself has compounded 19.8% a year over the past 10 years. Today the market pays 41.2× P/E, the 68th percentile of its own 11-year range.

What the two numbers say together. The multiple is full against its own past, and the growth the price is paying for is close to what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 26 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 25 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Consistent Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Coforge Ltd reads as consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROCE at 20.8% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

4-Factor Sector Score

62.7/100 — rank 2 of 19 in IT Services · 100% evidence confidence

Coforge Ltd scores 62.7 out of 100 against the 19 companies it is compared with in IT Services, ranking 2. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 26.9 + 14.8 + 13.5 + 7.5 = 62.7. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Coforge Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Free Cash Flow Guidance Raised Above Prior 70%-80% Range · 28 July 2026. In October 2025, management said sustained FCF to PAT should be around 70% to 80% going forward. In July 2026, it guided to more than 100% for FY27, a material change that affects cash-flow modeling; although the latest call cited a structurally changed approach, it did not quantify or reconcile the basis for the new target.

Foreign-Exchange Hedging Policy Appears to Have Shifted · 28 July 2026. October 2025 described a defined rolling four-quarter hedge policy covering 90%, 80%, 70%, and 60% of net exposure. July 2026 instead said the company was not hedging more and would rely on a natural hedge, without explaining whether this replaced or only supplemented the previously stated policy; the change could materially alter exposure to currency volatility and hedge losses.

Government Business Disclosure Contradiction · 16 June 2026. In the Jun 2026 call, management claimed that they announced in the May 2025 call that a poorly performing government business was being closed or hived off. However, in that actual May 2025 call, no such announcement was made; instead, the government business was highlighted as a growing sector being built up painstakingly.

AdvantageGo Divestiture and Loss Discrepancy · 16 June 2026. During the May 2025 call, management stated they had signed a definitive agreement to sell their entire stake in the AdvantageGo business, which had generated an EBIT loss of 5 million dollars. However, in the Jun 2026 call, management described the action as closing the business rather than selling it, and retrospectively doubled the reported annual loss of that business to 10 million dollars.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions