Coforge targets USD 5 billion FY30 revenue as AI and large deals accelerate growth

Investment View and Valuation

In its June 17, 2026 Analyst Meet Update, Prabhudas Lilladher retained its BUY rating on Coforge and its target price of Rs 2,020, valuing the stock at 28 times FY28E EPS. The broker remains constructive on Coforge’s next growth phase, supported by large-deal momentum, a sizeable executable order book, AI-led opportunities and the strategic expansion of its engineering capabilities through Encora.

FY30 Growth Roadmap

At Coforge’s Investor Day, management set a FY30 revenue ambition of USD 5 billion, comprising USD 4.3 billion of organic revenue and approximately USD 500 million from acquisitions in FY28. This implies approximately 19 per cent reported revenue CAGR and approximately 15 per cent organic revenue CAGR over FY26-FY30.

Management’s strategy is to scale strategic accounts; expand Healthcare and Public Sector while retaining momentum in BFSI and Travel; deepen AI ecosystem partnerships; and pursue strategic acquisitions. Management expects Public Sector outside India, Other verticals and Healthcare to grow faster than the overall portfolio.

AI-Led Opportunities and Engineering Capabilities

Management believes Coforge is structurally positioned to benefit from AI adoption. It expects AI-led demand across engineering, cloud, data, security and agentic workflows to more than offset productivity-led cannibalisation of legacy services, resulting in a net 25-35 per cent increase in IT outsourcing spend over the next five years.

Data, Cloud and AI-led Engineering are expected to be important growth drivers. Coforge has invested in its Data Cosmos platform, which includes more than 120 data assets, over 68 agents and domain-specific solutions. The company increasingly seeks to monetise outcomes, intellectual property and AI agents rather than traditional effort-based services.

Its Mod Squad framework represents a move from AI-assisted to AI-native and agentic delivery. Management cited productivity, faster time-to-market and delivery-quality benefits from this approach.

Large-Deal Momentum and Vertical Diversification

Large-deal execution is a key positive in the broker’s thesis. Coforge won 21 large deals in FY26, compared with 15 in FY25, while its win ratio improved to 47 per cent from 38 per cent. The broker highlighted FY26 order intake of USD 2.3 billion and an executable order book of USD 1.8 billion, up 16 per cent year-on-year.

Management expects a healthy Healthcare and Public Sector pipeline to sustain momentum and sees potential for one Public Sector client to reach approximately USD 100 million in annual revenue. BFSI and Travel remain the largest verticals, but management expects a more balanced mix as Healthcare, Public Sector, Data, Cloud and AI-led Engineering scale.

Margins, Cash Flow and Financial Outlook

Management reiterated confidence in sustaining approximately 16.5 per cent EBIT margin in FY27 despite Encora-related amortisation headwinds. Expected support includes exiting low-margin businesses, AI-led delivery efficiencies and G&A optimisation. It also targets free-cash-flow to PAT conversion of more than 100 per cent in non-acquisition years, while improving RoCE and RoE.

Estimate Changes

The broker reduced constant-currency revenue-growth estimates to 43.0 per cent for FY27E and 15.1 per cent for FY28E, from 45.7 per cent and 14.9 per cent, respectively. The changes incorporate Coforge’s exit from the India Government business, which is estimated to have a USD 50 million FY27E revenue impact.

Risks and Constraints

• Near-term AI productivity cannibalisation.
• Encora amortisation headwinds.
• The exit from the India Government business.
• Potential equity dilution if future large acquisitions are funded through debt and equity.

Management is evaluating a possible dividend-policy revision to retain more cash for faster repayment of USD 550 million of acquisition-related debt. No decision had been finalised.