UBS initiates India's Coforge at 'neutral' on robust revenue outlook, flags AI concerns

LTM

23/03/2026 05:42

** UBS initiates coverage on IT firm Coforge COFO.NS with "neutral" rating, PT of 1,240 rupees

** Brokerage highlights 15% annual revenue CAGR over FY26-FY28, driven by organic growth, acquisitions

** However, flags concerns over acquisitive strategy, weaker GenAI positioning vs peers

** Recent Encora acquisition at stretched valuations will weigh on shares despite adding capabilities, geographic diversification - UBS

**Notes AI positioning ahead of large-caps but trails midcap peers like Persistent Systems PERS.NS, LTIMindtree LTIM.NS due to limited exposure to AI-intensive verticals (consumer, hi-tech), lower Americas presence

** Stock rated "Buy" on average by 32 analysts; median PT 1,985 rupees - data compiled by LSEG

** COFO down 0.4% to 1085 rupees; YTD, down 34.5%

(Reporting by Mridula Kumar in Bengaluru)

((Mridula.Kumar@thomsonreuters.com;))