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ICICI Securities has reduce call on Coforge with a target price of Rs 4030. The current market price of Coforge Ltd. is Rs 4680.05. Time period given by analyst is one year when Coforge Ltd. price can reach defined target.
Coforge Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 28808.55 Crore) operating in IT Software sector.
Coforge Ltd. key Products/Revenue Segments include Sale of services and Software Products for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 1577.10 Crore, up 6.73 % from last quarter Total Income of Rs 1477.70 Crore and up 36.24 % from last year same quarter Total Income of Rs 1157.60 Crore. Company reported net profit after tax of Rs 161.50 Crore in latest quarter.
Investment Rationale
Order intake during Dec’21 (US$247mn) remained healthy with sharp skew towards EMEA. Company hinted at organic growth of 24% (CC, vs 19% earlier) for FY22. Pre-RSU EBITDA margin guidance of 18.9-19% was reiterated. It implies a strong exit rate in Q4FY22 with margin expansion of ~130bps, which is impressive in the current context. This is expected to be led by tailwinds like operating leverage, higher offshorisation and pyramid rationalisation. While the brokerage likes the company for its differentiated competitive positioning in certain niche areas (e.g. insurance, TTH), expensive valuation (~27x FY24E EPS) is the key reason behind the REDUCE rating.
Promoter/FII Holdings
Promoters held 49.97 per cent stake in the company as of 31-Dec-2021, while FIIs owned 19.12 per cent, DIIs 20.28 per cent.
Coforge Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 28808.55 Crore) operating in IT Software sector.
Coforge Ltd. key Products/Revenue Segments include Sale of services and Software Products for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 1577.10 Crore, up 6.73 % from last quarter Total Income of Rs 1477.70 Crore and up 36.24 % from last year same quarter Total Income of Rs 1157.60 Crore. Company reported net profit after tax of Rs 161.50 Crore in latest quarter.
Investment Rationale
Order intake during Dec’21 (US$247mn) remained healthy with sharp skew towards EMEA. Company hinted at organic growth of 24% (CC, vs 19% earlier) for FY22. Pre-RSU EBITDA margin guidance of 18.9-19% was reiterated. It implies a strong exit rate in Q4FY22 with margin expansion of ~130bps, which is impressive in the current context. This is expected to be led by tailwinds like operating leverage, higher offshorisation and pyramid rationalisation. While the brokerage likes the company for its differentiated competitive positioning in certain niche areas (e.g. insurance, TTH), expensive valuation (~27x FY24E EPS) is the key reason behind the REDUCE rating.
Promoter/FII Holdings
Promoters held 49.97 per cent stake in the company as of 31-Dec-2021, while FIIs owned 19.12 per cent, DIIs 20.28 per cent.
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