Coforge Share Price Jumps 6% After Q2 Profit Soars 86% – What Should Investors Do?

Coforge Ltd. (formerly NIIT Technologies) witnessed a sharp 6% surge in its share price after reporting an 86% YoY jump in Q2 net profit, beating market expectations. The stellar earnings have reignited investor interest, but is the stock still a buy at current levels? Here’s a detailed analysis.

Coforge Q2 FY24 Results: Key Highlights

The IT services firm delivered a blockbuster performance with:
– Net profit at ₹228 crore (up 86% YoY from ₹123 crore)
– Revenue growth of 13.5% YoY to ₹2,282 crore
– EBITDA margins expanded to 17.2% (vs. 15.5% YoY)
– Order book strengthened with $345 million in new deals

Why Did Coforge Shares Rally?

The stock’s sharp rise was driven by:
1. Blowout Earnings – Profit nearly doubled, exceeding estimates.
2. Margin Improvement – Cost optimization boosted profitability.
3. Strong Guidance – Management reaffirmed double-digit FY24 growth.

Analyst Recommendations: Buy, Sell, or Hold?

Brokerages remain upbeat but differ on the stock’s valuation:
– Morgan Stanley (Overweight, TP ₹6,200): Bullish on deal wins & margins.
– JP Morgan (Neutral, TP ₹5,100): Upgraded but sees limited upside.
– Kotak (Hold, TP ₹5,000): Fairly valued post-rally.

Should You Buy Coforge Stock?

✅ Pros for Investing:

✔ Strong revenue & margin growth
✔ Healthy order book ($345M TCV)
✔ Attrition down to 13.5% (vs. 17.4% YoY)

⚠️ Key Risks:

✖ Valuation concerns after 40% rally in 2023
✖ Global IT spending slowdown risks
✖ Competition from TCS, Infosys

Final Verdict: Hold or Wait for Dip?

Existing holders can hold given strong fundamentals, but new investors may wait for a better entry point. Short-term traders can ride momentum, while long-term investors should track execution on large deals.

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