Coforge share price hits a record high, jumps over 100% in seven months; should you buy the stock?
Coforge share price surged nearly 4% to a record high of ₹9,349.45 on December 12, despite a weak market.
Coforge share price jumped almost 4 per cent to hit its record high of ₹9,349.45 in intraday trade on the BSE on Thursday, December 12, in an otherwise weak market. Coforge share price opened at ₹9,100 against its previous close of ₹8,999.80 and jumped 3.9 per cent to an all-time high of ₹9349.45. Around 1:20 PM, the stock traded 2.42 per cent higher at ₹9,217.65 apiece. Equity benchmark Sensex was 0.25 per cent down at 81,321 at that time.
Coforge share price trend
The large-cap IT stock has seen solid gains this year so far. It hit a 52-week low of ₹4,291.05 on May 9 this year and has been in the green since June this year, on a monthly scale.
Considering today's high, it has surged 118 per cent from its 52-week low level in a little over seven months.
Over the last year, the stock has jumped nearly 60 per cent.
Coforge news
In an exchange filing on December 10, Coforge announced a partnership with ACORD Solutions Group. The company said the partner (LIP) program. This partnership will drive automated submissions placing, accounting, and claims data exchange across its global broker, insurer, and reinsurer clients.
“At Coforge, we have established strategic partnerships with leading core platform providers. These alliances have positioned us as market leaders in driving core transformation for our insurance clients. Our partnership with ACORD Solutions Group signals a significant step forward in developing connected enterprise solutions that are not only industry-leading but also future-ready,” said Rajeev Batra, EVP & Head Insurance, Coforge.
The stock rose about a per cent on December 10. However, in the next session on December 11, it slipped by 0.07 per cent on profit booking.
Should you buy Coforge stock at this juncture?
Experts appear positive about the stock for the long term due to the company's ambitious growth targets and strong financial performance, which is supported by an expanding client base.
According to Nirmal Bang Institutional Equities, the company's CFO appears confident about achieving $2 billion in revenue by FY27E. Moreover, the company aims for a revenue CAGR of 15-18 per cent over the next seven years, which aligns with the revenue growth CAGR over FY17-24.
Nirmal Bang has a buy call on the stock with a target price of ₹10,432, implying a 16 per cent upside potential.
"We like the company for its (a) consistent outperformance versus industry, (b) solid execution and domain capability, (c) stable and young leadership, (d) robust deal pipeline, and (e) multiple margin expansion levers due to lowest attrition, optimum utilisation and creating in-house laterals," said Nirmal Bang.
Nirmal Bang believes Coforge falls under the stable compounder category, similar to Persistent Systems. The brokerage firm observed while Persistent Systems is a mix of ER&D and IT business, Coforge is a pure-play IT services player where the industry growth is not as high as ER&D industry.
Nirmal Bang expects it to deliver revenue, EBIT and PAT CAGR of 18 per cent, 20 per cent and 34 per cent, respectively, over FY25-27E.
Sagar Shetty, a research analyst at StoxBox, pointed out that Coforge is strategically poised to seize opportunities in the burgeoning AI market.
"Coforge is diversifying its revenue streams through active partnerships with clients to implement practical AI programs. and expanding its footholds in healthcare, retail and hi-tech verticals by leveraging Cigniti acquisition. With an impressive order book growth, with its next 12-month order book up by over 19 per cent year-on-year ( YoY), at $1,070 million, revenue visibility stands clear," said Shetty.
Technical experts notice an upward momentum in the stock which could potentially push the stock beyond the ₹10,000 mark.
According to Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, Coforge has recently displayed a strong bullish trend by successfully breaching the R3 resistance level, a key technical milestone indicating significant upward momentum.
Patel pointed out that the persistence of overbought conditions in the stochastic oscillator further underscores the strength of the bullish bias, as it signals sustained buying interest despite being in an overextended zone. This alignment of price action and technical indicators suggests that market participants are confident in the stock’s upward trajectory.
"If Coforge manages to secure a closing price above the critical level of ₹9,050, it could act as a trigger for further upward movement. Such a close would validate the breakout and pave the way for a potential rally toward the psychological and technical target of ₹10,000 in the coming sessions, supported by continued positive sentiment and momentum in the stock," said Patel.
Mandar Bhojane, an equity research analyst at Choice Broking also underscored robust upward momentum and investor confidence in the stock.
Bhojane highlighted that the daily chart of Coforge exhibits a strong and sustained bullish trend. In recent months, the stock has consistently formed higher highs and higher lows, a classic indication of an uptrend.
Bhojane further pointed out that the Relative Strength Index (RSI) is at an elevated 86.96, signalling strong buying interest. Additionally, the stock is trading significantly above its 20-day, 50-day, and 200-day EMAs, emphasizing the strength of the prevailing bullish momentum. The widening gap between these moving averages further validates the upward trajectory.
"Should the stock break out above current levels, it is well-positioned to target the short-term price range of ₹10,000 to ₹10,200. On the downside, immediate support is identified at ₹8,900, with a recommended stop-loss at ₹8,600 to manage risks effectively in case of unexpected reversals," said Bhojane.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
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