BENGALURU: India’s Coforge stock added more than $500 million in market capitalisation on Wednesday, closing 9.5% higher at 1,280 rupees, after the mid-tier IT firm forecast robust earnings and its margin beat surprised analysts.
Coforge’s upbeat fiscal 2027 earnings outlook, supported by strong deal wins, order-book visibility and an improvement in operating margins, sharply contrasted the outlooks of larger peers Infosys and HCLTech, which forecast subdued growth from AI-led spending caution and geopolitical tensions.
NSE data showed that the stock’s put-call ratio - a measure of bearish bets relative to bullish ones - was at 0.53, signalling bullish positioning, with call volumes running at nearly twice the pace of puts.
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Meanwhile, data also showed options traders unwound their bearish positions, with the 1300 contract being the most active for the day - suggesting the market is betting that Coforge’s rally may still have room to run.
The stock logged its best session in more than a year and led gains on the Nifty IT index, which rose 0.5%. It was the stock’s busiest day since 2023, with about 27 million shares changing hands - almost nine times its 30-day average.
Brokerage Jefferies said the results were a “clear positive surprise”, citing a 230-basis-point sequential jump in earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to 16.6%, driven by lower costs and operating leverage.
“Coforge remains our preferred pick in the sector,” said brokerage Jefferies. It hiked its price target to 1,860 rupees from 1,620 rupees and reiterated a “buy” rating, joining Prabhudas Lilladher, which also hiked PT to 2,020 rupees from 1,870.
Coforge on Tuesday forecast EBITDA growth of more than 20.5% on a consolidated basis in FY27 and announced that its March-quarter profit more than doubled from a year ago.
Strong deal wins and order-book growth provide visibility for double-digit organic growth, the firm said, even as it trimmed its lower-margin India business.
For the year, Coforge is down 23%, trailing the sub-index’s 22% decline. The company also trades at a slight premium, with its 12-month forward price-to-earnings ratio at 21.47, compared with the industry average of 18.42, as per LSEG data.
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