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INVESTMENT INSIGHTS

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 10-year financial track record.
Q.3 Is Coforge Ltd undervalued or overvalued?
Coforge Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is Coforge Ltd a good buy now?
Coforge Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

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 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.3 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.4 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.5 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 1.15 1.27
ROE 19.7 25.81
ROCE 25.68 31.71
Cash Conversion Cycle 31 days 31 days
Q.6 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.7 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.8 Net Profit Margin of Coforge Ltd?
Coforge Ltd Net Profit Margin is 8% for FY-2025, is below with 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
Q.9 Debt to Equity ratio of Coforge Ltd?
Coforge Ltd Debt-to-Equity ratio is 0.11, which is lower with the industry average of 0.12, indicating lower 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

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)

Q.1 Revenue growth of Coforge Ltd vs industry peers?
Coforge Ltd revenue CAGR is 23.56%, compared to the industry median CAGR of 18.62%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth 31.3 18.6
Gross Profit Growth 26.1 11.2
Operating Profit Growth 17.1 12.6
Net Profit Growth 13.6 9.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover 1.15 1.23
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 29% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price
CAGR		 29% 15.6% 13.4% -19.1%
Q.3 Valuation ratios of Coforge Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 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 42.66 48.68 47.37
Price to Book 2.12 8.73 2.63
Price to Sales 3.36 4.12 4.79
EV to EBITDA 19.28 25.27 16.48

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3. Coforge
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6. Hexaware Tech.

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