Home / Brokerages view / Coforge Shares Surge 11% as Brokerages Maintain Bullish Stance on Mega Deal with Sabre; Here is What Brokerages Says on This Deal

Coforge Shares Surge 11% as Brokerages Maintain Bullish Stance on Mega Deal with Sabre; Here is What Brokerages Says on This Deal

2025-03-05 Niranjan Ghatule

Coforge, a leading IT services company, saw its shares jump 11% after announcing a landmark 13-year contract with Sabre, a global software and technology provider for the travel industry. The total contract value (TCV) of this deal stands at a massive $1.56 billion, making it the largest in the company’s history. The deal has garnered a positive response from major brokerages, who believe it will significantly enhance Coforge’s growth prospects.

Brokerage Views on Coforge

JP Morgan: Overweight (OW), Target Price: ₹11,500

JP Morgan remains bullish on Coforge, maintaining an Overweight (OW) rating with a price target of ₹11,500. The brokerage notes that this deal will boost the travel segment’s revenue contribution from 18% to 24%, turning it into a $400 million vertical. Additionally, the deal is expected to strengthen Coforge’s ability to secure large and mega deals, aligning with its ambitious FY27 revenue target of $2 billion annually.

Kotak Institutional Equities: Upgrade to BUY, Target Price: ₹9,000

Kotak has upgraded Coforge to a BUY with a revised target price of ₹9,000. The firm highlights that:The 13-year Sabre deal is a significant win for Coforge,The revenues from this contract could be front-loaded, meaning the company might see higher earnings in the initial years.The deal underscores Coforge’s strong sales execution and solutioning capabilities, which could help the company gain further traction in the industry.

Morgan Stanley: Overweight (OW), Target Price: ₹11,500

Morgan Stanley has also reiterated its Overweight stance with a target price of ₹11,500. Key observations from the brokerage include:

This is Coforge’s largest deal ever.If the revenue starts flowing from Q1 FY26, the contract could add $80-$120 million in incremental revenue for FY26.This translates to a 5-8% revenue growth boost, depending on how quickly the deal ramps up.The deal poses an upside risk to FY26 revenue estimates, potentially leading to higher earnings growth than previously projected.

The Sabre deal is a game-changer for Coforge, significantly strengthening its position in the travel technology space. With revenue contributions expected to begin soon, brokerages see strong growth potential for the company in the coming years. Investors have responded positively, sending Coforge shares soaring by 11%.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research and consult a financial advisor before making investment decisions. Neither the author nor SensexNifty.com is responsible for any investment actions taken based on this article.