Coforge Aims To Grow In Mid-Teens Through Next Fiscal Despite Macro Hiccups
Jefferies maintains a 'buy' rating on Coforge with a revised target price of Rs 6,580, implying an upside of 13.8%.
Coforge Ltd. is confident of growing in the mid-teens in the current and the next financial years in its endeavour to become a $2-billion company.
The digital engineering company expects to clock a revenue growth at the lower end of its guidance of 13–16% in the current fiscal, Coforge's deputy chief financial officer, Saurabh Goel, told Jefferies Financial Group Inc. during an investor meeting.
This is despite higher-than-expected furloughs in the October–December quarter and unfavourable macroeconomics, according to a note by Jefferies on Sunday. The Noida-based company aims to clock similar growth in the next fiscal on the back of deal wins even if the demand doesn't pick up.
Jefferies On Coforge: Key Takeaways
Jefferies maintains a 'buy' rating on Coforge with a revised target price of Rs 6,580 from an earlier Rs 5,250, implying an upside of 13.84%.
Macro remains challenging, furloughs longer than usual in the third quarter due to shorter notices.
Recent deal wins suggest that the outlook for the fourth quarter may be better.
Company is winning deals in the banking, financial services and insurance space, not much traction in travel.
Focus on cost optimisation to improve margins by 150–300 basis points over the next three–four years.
A well-diversified revenue stream—public sector, healthcare, hitech and retail—key to becoming a $2-billion enterprise.
Barings, which recently sold its stake in Coforge, had limited influence on operations.
Focus remains on delivering sector-leading growth despite promoter exits.
