India's Coforge stock on track for biggest jump in a year on upbeat outlook

India’s Coforge stock jumped as much as 11.1% on Wednesday, on track to log its best session in more than a year, after the mid-tier IT firm forecast robust earnings and its margin beat surprised analysts.

The stock was trading 9.1% higher at 11:15 a.m. IST, topping the Nifty IT index that rose 1.2%. Shares have largely underperformed this year, dropping 24% so far compared with a 22.4% drop in the sub-index.

The company on Tuesday forecast earnings before interest, taxes, depreciation, and amortization growth of more than 20.5% on a consolidated basis in FY27, while announcing that its March-quarter profit more than doubled from a year ago.

The forecast was sharply in contrast to larger peers Infosys and HCLTech outlooks of subdued growth as artificial intelligence-led spending caution and geopolitical tensions weigh.

“Coforge remains our preferred pick in the sector,” said brokerage Jefferies, while hiking the target to 1,860 rupees from 1,620 rupees and reiterating a “buy” rating.

The brokerage said the results were a “clear positive surprise”, citing a 230-basis-point sequential jump in earnings before interest and taxes margin to 16.6%, driven by lower costs and operating leverage.

Strong deal wins and order-book growth provide visibility for double-digit organic growth, the firm said, even as Coforge trims its lower-margin India business.

Prabhudas Lilladher lifted its target to 2,020 rupees from 1,870, pointing to strong execution, steady revenue growth and sustained momentum in large deal wins.

Both brokerages said the margin improvement marks the start of a structural reset, supported by portfolio clean-up, cost optimisation and increased use of AI across delivery and operations.

Twenty-two of 30 brokerages, including Prabhudas Lilladher and Jefferies, rate the stock “buy” or higher, while the median price target was at 1,870 rupees, according to data compiled by LSEG.