1:5 stock split record date soon: This IT stock rallies 7% post decent Q4 results

After reporting decent earnings for the March quarter, shares of the midcap IT company Coforge in Tuesday’s trade (May 6, 2025) jumped up to 7 per cent to hit the day’s high price of Rs 7,999. At around 10:44 am, the stock pared most of its early gains and traded higher by 1.69 per cent or Rs 126.6 at Rs 7,625.7 per share on the BSE.

For the review quarter, the company’s consolidated net profit rose 21 per cent sequentially to Rs 261 crore as against Rs 216 crore in the prior quarter. Zee Business research estimated profit to come in at Rs 291 crore. Revenue during the quarter also edged higher by 4.7 per cent during the March quarter to Rs 3,410 crore. Revenue stood at Rs 3,258 crore in the December quarter of the FY25. Revenue in dollar terms, meanwhile, increased by 3.3 per cent.

On the operational front, while EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization improved by 13.7 per cent to Rs 574.8 crore, EBITDA margin improved by 134 basis points to 16.9 per cent in Q4 FY25 as compared with Q3 FY25.

Coforge’s guidance

The company has guided for strong growth in FY26. Sudhir Singh, Chief Executive Officer and Executive Director, Coforge said, “The $1.56 Bn TCV deal signed in Q4, a 47.7% YoY increase in the order executable book for next twelve months, and a growing large deals pipeline positions us well for strong growth in FY26.” 

Coforge’s 1:5 stock split

For its 1:5 stock split announced in March this year, the company announced June 4 as the record date. The company as per its filing with the exchanges announced this stock split primarily to enhance its shareholder base by rendering the scrip more affordable.

Brokerages on Coforge post its Q4FY25 report card

Incred Equities has upgraded the stock to ‘hold’ from the earlier ‘reduce’ call citing the recent price correction. The brokerage has also revised the target on the stock higher to  Rs 8,006 from Rs 7,748 earlier.

Management commentary suggests that organic growth is unlikely to moderate in FY26F vs. FY25; overall growth could be aided by mega deal ramp-up and the EBIT margin could expand meaningfully vs. 13.2% exit in 4QFY25. We increase our FY26F revenue growth assumption modestly, which, in turn, drives a change in our rating and target price despite retaining the target PE/G multiple at 1x, added the brokerage in its report.

Centrum Broking, meanwhile, anticipates 24 per cent potential upside for the stock as it pegs target for Coforge at Rs 9,331. The brokerage maintained ‘buy’ on the stock at a PE of 35x on March’27E EPS.

We have decreased target PE multiple from 38x to 35x to account for near term uncertainties in the macro environment, it noted.