Synopsis:- Shares saw volatility after a Rs 17,000-crore AI-led acquisition announcement and fund-raise concerns. The US$2.35 billion deal adds scale, while broker targets of Rs 2,250– Rs 2,500 remain. Strong Q2FY26 revenue up 32% and a $1.63 billion order book support long-term growth despite execution risks.
The shares of the IT solution provider jumped up to 2.4 percent in today’s trading session after the company proposed an acquisition worth over Rs 17,000 crore to strengthen AI-led engineering, data, and cloud capabilities.
With a market capitalization of Rs 59,675.23 crore, the shares of Coforge Ltd were trading at Rs 1,672.50 per share, decreasing around 0.04 percent as compared to the previous closing price of Rs 1,673.25 apiece. In the past five day’s shares have plummeted 10.12 percent
Acquisition
According to the exchange filing, Coforge’s proposed acquisition involves buying 100% of the target companies for an enterprise value of US$2.35 billion. The key consideration of US$1,897 million (around Rs 17,073 crore at Rs 90/USD) will be discharged through preferential equity issuance, making it a non-cash transaction. Completion is expected within 4–6 months, subject to multiple global regulatory approvals.
Strategically, the deal strengthens AI-led engineering, data, and cloud capabilities while expanding delivery presence in the US and LATAM. Management expects long-term synergies and margin support, though near-term execution and integration remain critical. The structure limits immediate cash outflow but brings potential dilution, making timely synergy realization essential for EPS accretion.
Brokerage Review
Brokerages broadly remain constructive on Coforge, retaining ‘Buy’ ratings with targets between Rs 2,250– Rs 2,500. Kotak and Motilal Oswal see strong long-term revenue and capability synergies from Encora, but flag execution and integration as key risks. Achieving EPS accretion by FY27 will be demanding amid a cautious demand environment.
DAM Capital is more guarded, highlighting the rich valuation, slower organic growth at Encora, and assumptions around EPS accretion and amortisation. It also flags potential supply pressure from PE shareholders. Still, the recent 11% correction has improved valuation comfort, partly offsetting these concerns.
Q2FY26 Highlights
The company delivered a strong performance in Q2FY26, with revenue rising 32% year-on-year from Rs 3,026 crore to Rs 3,986 crore. Growth also remained healthy sequentially, as revenue increased 8% quarter-on-quarter from Rs 3,689 crore in Q1FY26 to Rs 3,986 crore.
Moreover, Net profit rose sharply, surging 82% year-on-year from Rs 234 crore in Q2FY25 to Rs 425 crore in Q2FY26. On a quarter-on-quarter basis, profit also climbed 19%, up from Rs 356 crore in Q1FY26, reflecting strong operational momentum.
Operational Highlights
The company posted a strong quarter with $514 million in order intake and an executable order book of $1.63 billion, up 26.7% year-on-year. It secured five large deals across North America and APAC, added 709 employees, and maintained a healthy 11.4% attrition level.
Coforge is a mid-sized IT services firm providing end-to-end digital, cloud, and software solutions to global clients. Counted among India’s top 20 software exporters, it serves marquee customers like British Airways and ING, with international subsidiaries across the US, Europe, and Asia supporting strong global delivery and client engagement.
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