COFORGE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Fundamental Analysis: Coforge Ltd (COFORGE) Fundamental Rating: 3.7

🧾 Core Financials Overview

Earnings Strength

EPS: ₹30 ➜ moderate earnings base

PAT growth: ₹266 Cr → ₹284 Cr ➜ QoQ rise of ~6.7%

Qtr Profit Var: 88.5% ➜ sharp annual improvement — cyclical strength

Return Metrics

ROE: 16.7% | ROCE: 20.7% ➜ healthy capital efficiency

Balance Sheet

Debt-to-equity: 0.17 ➜ low leverage — sound financial standing

Dividend

Yield: 0.88% ➜ decent for tech; minor income component

💸 Valuation Analysis

Indicator Value Insight

P/E Ratio 59.6 Significantly above industry average of 29.1

P/B Ratio ~9.01 (₹1,720 / ₹191) ➜ priced at a steep premium

PEG Ratio 7.32 Heavily overvalued — growth not matching valuation

📉 Verdict: Expensive across the board — PEG well above 1 suggests optimism already priced in.

🧠 Business Model & Competitive Edge

Mid-cap IT firm specializing in digital transformation, cloud, and AI solutions.

Diversified across BFSI, insurance, travel, and healthcare verticals.

Competitive edge

High-end analytics capabilities

Agile delivery frameworks

Strong US & EU client base

📊 Institutional Moves

FII ↓ 2.79% ➜ foreign trimming — cautious sentiment

DII ↑ 2.39% ➜ domestic conviction remains strong

📉 Technical View

RSI: 34.7 ➜ nearing oversold — potential reversal brewing

MACD: -27.5 ➜ bearish momentum prevalent

Price below 50 DMA, slightly above 200 DMA ➜ short-term weakness, medium-term resilience

✅ Suggested Entry Zone: ₹1,620–₹1,670 📌 Watch for RSI stabilization and MACD crossover for better timing

📅 Long-Term Holding Strategy

Coforge may appeal to

Investors seeking digital-first IT exposure with niche domain depth

Those comfortable with premium valuation for growth quality

Portfolios targeting AI-driven IT transformation leaders

⚠️ Caution: High valuation limits near-term upside unless backed by strong margin or deal wins. Entry should be timed around technical support levels with a long horizon.

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