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IDBI Capital Report
Coforge Ltd. beats the streets' estimates by far in Q2 on the back of robust set of numbers both in organic (6.3% QoQ in dollar term) and inorganic (including Cigniti, up by 6.1% QoQ in dollar term through cross-selling) businesses.
Growth was broad based across verticals such as BFS /Insurance /Travel /Government (5.2%/9%/6.2%/6.7%) and geos especially in America/ rest of world (10.4%/3.5%) sequentially.
In Q2 FY25, company saw an order intake of $ 516 million (Avenue run-rate of $300 million over the last 10 quarters), which includes $ 67 million from Cigniti.
The 12- months operating run-rate stood at $ 1.5 million along with a signed order book totaling to $1.3 billion, up by 40% QoQ.
With synergy benefits, cross selling and execution rigor, we expect company to grow exceptionally well in the coming quarters, however, furloughs would impact the growth in Q3.
We assume the coverage of the stock with a Buy rating and a target price of Rs 7,815 (39 times EPS FY26E).
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