Check Before You Invest : Coforge Ltd

Q: Which industry/sub-sector does Coforge Ltd belong to?

Coforge Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q: Is Coforge Ltd a good quality company?

Coforge Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Coforge Ltd undervalued or overvalued?

Coforge Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 39.18, Historic Median: 48.69. Price to Book, Current: 2.29, Historic Median: 8.72. Price to Sales, Current: 3.72, Historic Median: 4.08. EV to EBITDA, Current: 20.02, Historic Median: 25.16

Q: Is Coforge Ltd a good buy now?

Coforge Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Coforge Ltd?

Coforge Ltd revenue growth is 31.3% for FY-2025, which is above its 5-year CAGR of 23.56%, indicating faster growth.

Q: Gross Profit margin of Coforge Ltd?

Coforge Ltd Gross profit margin which is the profit after deduction of direct costs, is 14.3% for FY-2025, which is below its 5-year median of 15.8%, indicating decreasing margins.

Q: Operating Profit Margin of Coforge Ltd?

Coforge Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.1% for FY-2025, which is below its 5-year median of 16% indicating decreasing margins.

Q: Net Profit Margin of Coforge Ltd?

Coforge Ltd Net Profit Margin is 8% for FY-2025, is below its 5-year median of 9.42%, indicating decreasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 14.3, Historic Median: 15.8. Operating Profit Margin (%), Current: 14.1, Historic Median: 16. Net Profit Margin (%), Current: 8, Historic Median: 9.42

Q: Return on Asset of Coforge Ltd?

Coforge Ltd Return on Asset is 9.16%, which is below its 5-year historical median of 11.82%, indicating deteriorated asset utilization efficiency.

Q: Return on capital employed (ROCE) of Coforge Ltd?

Coforge Ltd Return on capital employed is 25.68% for FY-2025, which is below its 5-year historical median of 31.71%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : Coforge Ltd

BSE: 532541 NSE: COFORGE ISIN: INE591G01025

| Sector: IT & ITES | Industry: IT - Software

Snapshot

Q.1 Which industry/sub-sector does Coforge Ltd belong to?

Coforge Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q.2 Is Coforge Ltd a good quality company?

Coforge Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Coforge Ltd undervalued or overvalued?

Coforge Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	39.18	48.69
Price to Book	2.29	8.72
Price to Sales	3.72	4.08
EV to EBITDA	20.02	25.16

Q.4 Is Coforge Ltd a good buy now?

Coforge Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Coforge Ltd?

Coforge Ltd revenue growth is 31.3% for FY-2025, which is above its 5-year CAGR of 23.56%, indicating faster growth.

Q.2 Gross Profit margin of Coforge Ltd?

Coforge Ltd Gross profit margin which is the profit after deduction of direct costs, is 14.3% for FY-2025, which is below its 5-year median of 15.8%, indicating decreasing margins.

Q.3 Operating Profit Margin of Coforge Ltd?

Coforge Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.1% for FY-2025, which is below its 5-year median of 16% indicating decreasing margins.

Q.4 Net Profit Margin of Coforge Ltd?

Coforge Ltd Net Profit Margin is 8% for FY-2025, is below its 5-year median of 9.42%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	14.3	15.8
Operating Profit Margin (%)	14.1	16
Net Profit Margin (%)	8	9.42

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Coforge Ltd?

Coforge Ltd Return on Asset is 9.16%, which is below its 5-year historical median of 11.82%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Coforge Ltd?

Coforge Ltd Return on capital employed is 25.68% for FY-2025, which is below its 5-year historical median of 31.71%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Coforge Ltd?

Coforge Ltd Return on equity is 19.7% for FY-2025, which is below its 5-year historical median of 25.81%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Coforge Ltd?

Coforge Ltd Cash conversion cycle is 31 days, in line with its 5-year historical median of 31 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	1.15	1.27
ROE (%)	19.7	25.81
ROCE (%)	25.68	31.71
Cash Conversion Cycle	31 days	31 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Coforge Ltd?

Coforge Ltd Debt-to-Equity ratio is 0.11, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Coforge Ltd?

Coforge Ltd Debt to cash flow from operations is 0.57, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Coforge Ltd?

Q.1 Promoter shareholding and pledge status of Coforge Ltd?

Promoters hold 0.00% of the Coforge Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Coforge Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Coforge Ltd vs industry peers?

Coforge Ltd revenue CAGR is 23.56%, compared to the industry median CAGR of 19.32%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	31.3	19.3
Gross Profit Growth (%)	26.1	12.5
Operating Profit Growth (%)	17.1	14.2
Net Profit Growth (%)	13.6	11.6

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.15	1.22
ROE (%)	19.7	25.84
ROCE (%)	25.68	32.8
Cash Conversion Cycle (days)	31.13	31

Valuation & price assessment

Q.1 Stock return of Coforge Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 30.9% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	30.9%	16%	17%	-15.6%

Q.2 Valuation ratios of Coforge Ltd vs historical?

The current P/E ratio of 39.18 is lower than its historical median of 48.69, indicating that the stock is trading below its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	39.18	48.69	47.38
Price to Book	2.29	8.72	2.64
Price to Sales	3.72	4.08	4.79
EV to EBITDA	20.02	25.16	16.75

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Check Before You Invest : Coforge Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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Check trending companies

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