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Coforge gets buy rating as brokerage sees 20% topline growth in three years

Updated : June 17, 2022 15:40:08 IST

Coforge, formerly known as NIIT Technologies, was upgraded by Antique to ‘buy’ from ‘hold’ on Friday, June 17. While the brokerage house has cut the target price to Rs 4,700 from Rs 5,200, it still suggests a 43 percent upside from current levels.

On Friday, June 17, Coforge stock was trading at Rs 3,368.95, up 2.25 percent, on BSE at 3.30 pm. The stock has been gaining for the past three days and has risen 4.64 percent returns in the period. It is 4.71 percent away from 52-week low of Rs 3224.45.

Antique believes that the Indian multinational information technology company would maintain an organic topline growth of 15-20 percent in constant currency terms over the next two to three years.

For FY23, Coforge had given the guidance of 20 percent constant-currency growth, which Antique believes is "conservative" and they can grow further than that. In the past, Coforge has invested in the right areas to win large deals and that momentum is likely to continue, according to a note from Antique.

Also Read: Employers feel inflation heat in May and IT hiring slows, shows survey

The only risks the brokerage has highlighted are the American Depositary Receipts (ADR) listing and the potential Baring exit. Hence, Antique has given a 10 percent discount to other midcap peers like Mindtree and Mphasis.

Baring Private Equity Asia is the controlling owner of Coforge, with a 50.18 percent stake. Coforge is planning a US listing via the ADR route to join peers such as Infosys and Wipro. Baring is likely to sell part stake as part of the proposed transaction.

Watch the accompanying video of CNBC-TV18's Nimesh Shah for more details.

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