Coforge Ltd.

Our reasoning

Strong deal momentum supports revenue visibility Coforge reported quarterly order intake of over US$1 Bn in Q2FY27, up 51% QoQ and 102% YoY, with a record 8 large deals signed. The next 12-month executable order book reached US$2.4 Bn, up 45% YoY, providing strong revenue visibility. Management expects to sign 8 or more large deals in Q3FY27, with most new deals ramping up almost immediately, supporting sustained growth. AI-led engineering drives differentiated growth AI-led engineering, data integration and cloud contributed 86% of Q2FY27 revenue, supported by over 520 AI engagements across 225+ clients and more than 260 agents deployed in live operations. Coforge's Nuuron, Forge-X and Momentuum Blue capabilities position it to capture enterprise demand for AI-led workflow automation, legacy modernisation and outcome-based transformation. Margin expansion creates operating leverage Management raised FY27 consolidated EBIT margin guidance from 15.5% to 16%, targeting 17% in Q4FY27 and at least 17% in FY28, subject to achieving the exit target. AI integration into existing fixed-price projects, G&A optimisation and improved delivery productivity are expected to drive margin expansion without cutting sales and marketing investments. Encora acquisition strengthens growth and cross-selling Encora's margin expansion is ahead of the acquisition plan, while revenue growth is expected to mirror Coforge's from Q3FY27. Integration of complementary data, cloud, AI and engineering capabilities, alongside nearshore delivery centres across Eastern Europe and Latin America, creates cross-selling opportunities. Coforge's largest current deal opportunity is with an Encora client, strengthening the potential for incremental growth.