Motilal Oswal Financial Services has reiterated a BUY rating on Coforge, calling it a structurally strong mid-tier IT services player with a sharp focus on AI-led transformation, large deals and underpenetrated geographies such as the US West Coast and Midwest. The brokerage has set a 12-month target price of Rs 3,000 per share against a current market price of Rs 1,951, implying a potential upside of about 54 percent, backed by an executable order book of USD 1.6 billion and strong traction in its core Banking & Financial Services (BFS) and Travel, Transport and Hospitality (TTH) verticals. While margins are expected to remain range-bound near 14 percent in the near term, Motilal Oswal projects robust earnings growth with FY28 earnings per share (EPS) of Rs 78.6 and return on equity (RoE) improving to nearly 25 percent, underlining a compelling risk-reward profile for long-term investors.

Motilal Oswal’s Investment Call and Key Levels

Rating and 12-month target
Motilal Oswal maintains a BUY stance on Coforge with a target price of Rs 3,000, valuing the stock at 38 times FY28 estimated EPS of Rs 78.6. This translates into an expected 54 percent upside from the prevailing market price of Rs 1,951, positioning Coforge as the brokerage’s top pick within its technology coverage universe.​

Suggested trading and investment levels
For positional investors, Motilal Oswal’s target of Rs 3,000 can be treated as the primary upside reference, while the downside is cushioned by the company’s strong balance sheet, improving free cash flow and expanding order book. Short- to medium-term participants may view the Rs 1,800–1,850 zone (implied support band just below current multiples and historical valuations) as a risk-management area, with an eye on compounding gains as earnings visibility strengthens; however, individual risk profiles should drive final entry and stop-loss decisions.​

Strategic Growth Pillars and Business Model

Four-pillar growth framework
Coforge’s strategy is anchored in four clearly defined levers: aggressive bets on AI-led engineering, data and ServiceNow; a pivot toward proactively sourced large deals instead of purely RFP-led opportunities; systematic scaling of key Fortune 2000 accounts; and targeted acquisitions aimed primarily at gaining client access rather than buying capabilities. Management is targeting around 20 large deal wins in FY26, with 10 already secured, signalling continued deal-flow intensity and enhanced revenue visibility over the next 14–16 months.​

Executable order book and Cigniti synergy
An executable order book of about USD 1.6 billion, with a book-to-bill ratio consistently above 1x, serves as a strong proxy for near- to medium-term revenue realization. The integration and cross-selling potential with Cigniti is expected to augment Coforge’s testing and quality engineering offerings, further deepening client relationships and reinforcing the company’s positioning in digital transformation and cost-takeout mandates.​

Core Verticals: BFS and Travel as Growth Engines

BFS: from niche to scaled franchise
The BFS business has transitioned from a niche presence to a scaled growth engine, with YoY growth in the segment sustaining in the mid-teens to 30 percent range over recent quarters. Tailwinds stem from lower interest rates, tighter regulatory frameworks, T+0 settlement initiatives and payments modernization, all of which are driving non-discretionary technology spends in compliance, risk and core operations.​

TTH: deep domain, large opportunity
Travel, Transport and Hospitality contributes roughly 23 percent of Coforge’s revenue and is backed by deep domain expertise and hyper-specialized solutions. Global airlines are expected to invest around USD 50 billion in technology modernization over the next decade, with modern airline retailing alone representing a USD 40 billion-plus opportunity, and Coforge’s Aeronova.AI Center of Excellence is designed to capture a disproportionate share of this value pool.​

Geographic Focus: Underpenetrated North America

Expanding beyond traditional strongholds
North America accounts for about 60 percent of Coforge’s revenue, yet remains underpenetrated relative to peers that derive 75–80 percent from this market. Historically, the company has been concentrated in BFS, insurance and TTH across Eastern and Southern US, but it now plans to rebalance exposure by scaling in the West Coast and Midwest, where it currently serves only 16 of the 216 Fortune 1000 companies headquartered there.​

Healthcare and new vertical opportunities
Healthcare and Life Sciences (HLS) is emerging as a meaningful growth driver, supported by rising healthcare IT budgets and visible anti-incumbency against existing vendors with expensive, drawn-out pilot cycles. Coforge is targeting four HLS sub-verticals—payers, med-tech, life sciences and providers—with payers offering the largest addressable base due to strong demand for technical debt reduction and consolidation of legacy platforms.​

AI-Led Transformation and Commercial Evolution

From experimentation to execution
Coforge expects enterprise AI adoption to move decisively from experimentation to execution, with boards and CXOs increasingly demanding clear business outcomes from AI investments. Management argues that the constraint is no longer data availability, but AI fluency—the capacity to embed AI into business processes with robust domain context and governance.​

Quasar AI platforms and outcome-based models
The company is investing across its Quasar AI Studio, Quasar AgentSphere, Quasar Marketplace and Quasar Trust platforms to industrialize the build, deploy and governance lifecycle of AI-driven solutions. Over time, this should support a shift away from traditional digital FTE models toward outcome-linked and value-based pricing constructs, which can structurally enhance margins and deepen client stickiness if executed well.​

Margins, Profitability and Financial Trajectory

Near-term margin stability, medium-term expansion
Management is guiding for EBIT margins to hold near 14 percent, although Motilal Oswal factors in a slightly more conservative FY26 estimate of 13.8 percent in light of the current demand environment. Even so, margins are projected to expand gradually to 14.4 percent by FY28, helped by operating leverage, richer large-deal mix and scaling of offshore delivery and AI-led productivity levers.​

Earnings growth and return ratios
Revenue is projected to rise from Rs 1,20,507 million in FY25 to Rs 2,65,962 million by FY28, implying a healthy multi-year compound growth profile. Adjusted PAT is expected to climb from Rs 10,038 million in FY25 to Rs 26,767 million in FY28, driving EPS from Rs 25.2 to Rs 78.6 and lifting RoE from 13.9 percent in FY25 to 24.8 percent by FY28, while maintaining a 50 percent dividend payout ratio.​

Valuation, Risk-Reward and Investor Takeaways

Valuation metrics and upside potential
At the current market price, Coforge trades at 43.6 times FY26 EPS, 32.8 times FY27 EPS and 24.8 times FY28 EPS, with a price-to-book multiple moderating from 9.1 times FY26 to 6.9 times FY28 as earnings compound faster than book. Enterprise value-to-EBITDA is set to ease from 21.3 times FY26 to 12.9 times FY28, while dividend yield improves from 1.1 percent to 2.0 percent over the same period, reflecting a more attractive yield profile alongside growth.​

Key risks and monitoring points
Investors should track the pace of large deal closures, execution quality in new geographies, and the speed of AI monetization relative to peers, as these will be pivotal to sustaining premium valuations. Any meaningful demand slowdown in BFS or travel, delay in integration synergies with Cigniti, or sharper-than-expected pricing pressure could cap near-term upside, though the long-term narrative remains anchored in robust order visibility, diversified vertical footprint and disciplined capital allocation.