The deal engine is running hot

The first quarter underscored Coforge's standing as one of the sector's fastest growers. Order intake of about Rs 6,150 crore came entirely from the organic franchise, lifting the 12-month executable order book to a record near Rs 19,830 crore — a 44.2 percent year-on-year jump. Management expects a heavier slate of large deals in the second quarter, several already signed, headlined by a Rs 2,050 crore five-year modernisation mandate in Europe. With conversion improving and the continuous order book deepening, Axis sees the momentum carrying into revenue over the coming quarters, led by banking and financial services and the travel, transportation and hospitality verticals.

AI moves from pilot to production

The second engine is an AI capability that is now visible in the delivery model rather than the marketing deck. Coforge has launched Nuuron, a platform built to carry clients from pilots to enterprise-scale adoption, and now fields more than 11,000 AI and data professionals, eight AI platforms, 22 AI assets and over 100 reusable AI agents, backed by about Rs 520 crore of AI investment in FY26.

Progress rings depict shares disclosed in the note; each is a TopNews rendering of the brokerage's figures.

Encora: integration ahead of plan

The third engine is the Encora acquisition, where the integration is running ahead of schedule. All 45 legal entities were migrated to a single SAP S/4HANA platform from May 1, unifying operations and reporting. General and administrative costs have been cut by 40 percent, bringing Encora's margins into line with the core, and management expects its growth profile to converge from the third quarter of FY27. Integration costs of about Rs 58 crore in the first quarter sat well within the planned Rs 134 crore budget, with only limited spend remaining. Tellingly, one Encora client has already become a top-10 account for the combined entity and is expected to generate more than Rs 445 crore of annual revenue over the next 12 to 18 months.

The estimates underneath

The target for investors

Coforge has compounded revenue, operating profit and earnings at roughly 26, 26 and 24 percent respectively over FY20-26, and Axis expects the pace to hold, with sales and net profit modelled to grow at about 32 percent and 42 percent a year over FY26-28. Applying 26 times FY28 earnings, the brokerage arrives at a Rs 1,980 target and a BUY rating, implying about 10 percent of upside. As an Axis PUNCH idea the horizon is deliberately short, three to six months, so the call is best read as a tactical entry into a structurally strong compounder trading well below its 52-week high — one where deal conversion, AI-led productivity and Encora's margin convergence are the catalysts to watch.