Coforge Share Price Jumps After Encora Deal Update; Is This IT Stock Poised For 49% Rally? Check Target Price

Coforge Share Price Today: Shares of Coforge jumped on Monday's intraday trade after the IT giant announced the acquisition of artificial intelligence firm Encora for $2.35 billion to boost its AI capabilities.

Coforge's share price was trading higher in the pre-market opening session; however opened lower on Monday. The stock was trading 1.85% lower at Rs 1642.3 per share on BSE at 9:20 am. The IT stock regained momentum and was up around 1.16% at 9:39 am.

Coforge Share Price Recommendation

Coforge's executable order book and resilient client spending across verticals will benefit the company's organic growth business, noted Motilal Oswal in its report on Monday, December 29. The brokerage has given a 'Buy' rating for Coforge share price indicating a 49% upside in its valuation. Motilal Oswal has given a target price of Rs 2,500 per share for Coforge in the long-term.

" We continue to view Coforge as a structurally strong mid-tier player well-placed to benefit from vendor consolidation/cost-takeout deals and digital transformation. We value Coforge at 32x (considering a potential dilution) FY28E EPS with a TP of INR2,500, implying a 49% potential upside. Reiterate BUY," noted MOFSL in its report.

However, execution of the transaction will remain critical for Coforge's long-term growth. "We note that the scale of the transaction is large; therefore, execution remains critical. Integration, leadership retention, margin management post-integration, and amortization will be the key monitorables."

Coforge's Encora Deal

Coforge is set to buy U.S.-based artificial intelligence firm Encora in a deal valued at $2.35 billion, aiming to strengthen its AI offerings and deepen its reach in North and South America, including a larger footprint in the western and midwestern United States.

The Indian IT services company said the acquisition should lift its in-house capabilities in product engineering, cloud and data solutions, while also widening access to Latin American talent. Coforge expects the combined business to generate about $2 billion in annual revenue by March 2027.

Coforge Encora acquisition AI strategy and market impact

Encora, supported by Advent International and Warburg Pincus, focuses on AI-driven services for product development, cloud platforms and data engineering. Indian technology firms, including Coforge, are increasingly backing AI-related projects, seeing them as a growing line of business as global interest in the technology increases.

Tech advisory specialist Pareekh Jain, founder of EIIR Trend, said the larger revenue base could alter the domestic pecking order. "The revenue coming in (from the merger) would help Coforge leapfrog Persistent, Mphasis and Hexaware to become India's seventh largest IT firm," Jain said.