Coforge Shares Soar 11% After Stock Split, $1.56 Billion Deal & Major Acquisition!

Coforge shares surged 11% to ₹8,006 on the NSE on March 5, 2025, following key announcements. The rally was fueled by a 1:5 stock split, a major partnership, and an acquisition. The company approved the stock split to enhance liquidity and attract small investors, dividing each ₹10 share into five ₹2 shares, with the record date to be announced.

Coforge also signed a 13-year, $1.56 billion agreement with Sabre Corporation to accelerate AI-driven travel solutions. Additionally, the company is acquiring Rythmos Inc. to strengthen its data and cloud engineering capabilities, with an initial payment of $30 million and potential earnouts up to $18.7 million. Coforge’s Australian subsidiary is also acquiring TMLabs, further expanding its global presence. Despite a 20% YTD decline, the stock has rebounded 85% from its 52-week low of ₹4,291.05. Coforge is also set to merge with Cigniti Technologies from April 1, 2025. Analysts have mixed views, with price targets ranging from ₹8,320 to ₹10,490.

Coforge Shares Soar 11% After Stock Split, $1.56 Billion Deal & Major Acquisition!

Coforge shares surged 11% to ₹8,006 on the NSE on March 5, 2025, following a series of major announcements that boosted investor confidence. The company’s board approved a 1:5 stock split, where each existing ₹10 equity share will be divided into five shares of ₹2 each, aimed at enhancing liquidity and making shares more accessible to retail investors. The record date for the split will be announced later. Additionally, Coforge has entered into a 13-year strategic partnership with Sabre Corporation, a global travel technology firm, under a $1.56 billion agreement, positioning Coforge as a key player in accelerating Sabre’s product development and AI-driven solutions.

Further strengthening its growth strategy, Coforge announced the acquisition of Rythmos Inc., an IT and ITES firm, to bolster its data and cloud engineering capabilities, particularly in the airline sector. The acquisition deal includes an initial purchase price of $30 million, with potential earnouts up to $18.7 million based on performance in 2025 and 2026, and is expected to close by March 31, 2025, without requiring regulatory approvals.

Coforge also acquired TMLabs through its step-down subsidiary Coforge Technologies Australia, further expanding its business. Despite a 20% decline year-to-date (YTD), Coforge shares have recovered 85% from their 52-week low of ₹4,291.05 in May 2024, although they remain 28% below their December 2024 peak of ₹10,017.95.

In Q3, the company reported a 10% year-on-year (YoY) growth in net profit to ₹268 crore, while revenue increased 40.3% YoY to ₹3,318.2 crore in constant currency terms. Coforge is also set to merge with Cigniti Technologies effective April 1, 2025, with management optimistic about synergy benefits, improved margins, and cross-selling opportunities in the coming quarters. Analysts have varied opinions on the stock, with ShareKhan giving a ‘buy’ rating with a ₹10,490 target, Nuvama Institutional Equities setting a ₹10,085 target, Indsec Research maintaining a ‘hold’ rating at ₹9,275, and Dolat Capital’s earlier sell target of ₹8,320 already being met.

These strategic developments have fueled strong investor sentiment, driving the stock’s rally. The stock split is expected to enhance liquidity and attract more retail investors, making Coforge’s shares more accessible to a broader investor base. The 13-year partnership with Sabre Corporation further strengthens Coforge’s position in the global travel technology sector, allowing the company to leverage its expertise in AI and product development. This long-term deal, valued at $1.56 billion, signals strong revenue visibility and growth potential for the company.

Additionally, the acquisition of Rythmos Inc. and TMLabs reinforces Coforge’s expansion strategy, particularly in data analytics and cloud engineering, crucial areas for the IT services industry. The company’s upcoming merger with Cigniti Technologies is also expected to drive operational synergies, improve margins, and unlock new business opportunities. Despite short-term volatility, analysts remain optimistic about Coforge’s growth prospects, with several maintaining a ‘buy’ rating on the stock, projecting strong long-term returns.