The brokerage said Coforge’s $1.56 billion multi-year agreement with Sabre Corporation
is its largest deal ever.
Assuming that the deal starts contributing to the company’s revenue from the first quarter of financial year 2026, then it could add $80 million to $120 million incremental revenue in the next financial year or 5% to 8% growth, depending on the ramp-up schedule. It said this could pose an upside risk to their revenue growth estimate for next year.
Kotak Institutional Equities has upgraded its rating on Coforge to “buy”, with a price target of ₹9,000 from ₹9,900 earlier, implying an upside potential of 25% from its previous closing price.
It too mentioned the Sabre contract and said the revenues from this engagement could be front-ended. The deal demonstrates Coforge’s sales prowess and strong solution capabilities in the TTH vertical, it said.
The brokerage added that the deal carries a few risks due to Sabre undergoing a transition phase and its weak financial position.
It said the primary risk in a typical mega deal would be related to execution and estimating efforts. The deal has an additional risk arising from Sabre’s financial positioning, it said. Sabre has $746 million gross cash and cash equivalents and gross debt of $1 billion as of December 2024. In the 2025 calendar year, Sabre expects to generate more than $700 million adjusted EBITDA, FCF of $200 million and cash interest payments of $375 million. The market cab of Sabre stands at $1.5 billion it said.
The brokerage added that Coforge would need to ensure efficient receivables collection, with stricter payment timelines to insulate from potential cash flow risks.
Coforge’s EBIT margin estimates are down by 50 to 60 basis points, driving its Earnings Per Share (EPS) forecast down by 4% to 5%. However, it sees this 18% decline in the stock price over the last three months as an attractive opportunity.JPMorgan too has an “overweight” rating on the stock with a price target of ₹11,500 per share.
It said the mega deal makes a statement of intent and elevates the company’s profile.
Given the size of the deal, the brokerage suspects it be slightly margin dilutive within a 10 to 20 bps hit on overall margin, but highly EPS accretive.
The deal should increase the travel segment to 24% of overall revenues from 18%, making it a $400 million vertical, it said.
JPMorgan also expects the deal to elevate Coforge’s ability to sign large deals and mega deals as it approaches its financial year 2027 target of $2 billion annual revenues.
Jefferies has a “buy” rating on the stock with a price target of ₹10,350 per share, an upside of 43% from the previous closing price.
It said the Sabre deal not only provides greater revenue growth visibility for the next financial year, but will also improve its positioning in the travel vertical and open doors to more such large deal wins in the future.
This also reflects Coforge’s ability to gain share irrespective of demand environment, it said. The brokerage raised the company’s financial year 2026-2027 earnings growth estimates by 3%-5%.
Of the 38 analysts that have coverage on the stock, 24 have a “buy” rating, four have a “hold” rating and 10 have a “sell” rating.
Coforge shares gained 10% to hit an intraday high of ₹7,933 apiece on Wednesday, March 5. The top Nifty Midcap gainer was trading 9.41% higher at ₹7,891.05 apiece at 10.05 am. The stock has gained 20.24% in the past six months.
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