On July 21, Coforge shares increased 1% in early trade after its earnings report for the April-June quarter. Despite challenging macroeconomic circumstances in the IT sector, the company sustained its growth guidance for FY24.

The mid-cap IT player’s revenue rose 2.4% in Q1FY24 to Rs 2,221 crore against 2,170 crore in the preceding quarter. However, the company’s net profit grew 43.9% to Rs 165.3 crore due to a lower base, providing an exceptional expense of Rs 52.3 crore in the preceding quarter.

On a YoY basis, revenue plunged 21.4%, while its net profit was up 10.4%. Moreover, the company also upheld its revenue guidance at the previous range of 13-16%.

At 09.22 am, Coforge shares were trading around 1% higher at Rs 4,854.25 on the NSE.

Factoring in Coforge’s quarterly performance, most brokerages retained their positive stance on the business.

HSBC raised its price target to Rs 5,640 with a ‘buy’ call on the stock. The firm sees the business’s robust executable order book fortifying it in the short term while strong Total Contract Value and large deals fixed for the medium term. The brokerage also likes the stock for the growth it offers.

Nomura also has a ‘buy’ call on Coforge with a price target of Rs 5,300. The brokerage expects margins for Coforge to recover this fiscal and also foretold that its AI segment would turn net positive on revenue in the medium term.

Nuvama Institutional Equities broking firm has a ‘buy’ call for Coforge with a target of Rs 5,520.

However, brokerages Jefferies and Motilal Oswal Financial Services have a complementary view of Coforge’s valuations. Both the brokerages feel the valuation is rich and already factors in the healthy growth potential of the company. MOFSL has allocated a price target of Rs 4,460 for Coforge, while Jefferies has a target price of Rs 4,550.