Coforge Shares Surge 10% After Stock Split, $1.6 Billion Deal, Two Key Acquisitions

Shares of Coforge Ltd rallied nearly 10% to an intra-day high of Rs 7,933.60 on the National Stock Exchange (NSE) after the company announced a stock split, two acquisitions, and a fresh agreement.

The tech company will split the stock in a ratio of 1:5, which means that for every one equity share currently carrying a face value of Rs 10, it will be split into five equity shares. After the stock split, Coforge shares will carry a face value of Rs 2 each. The stock split is expected to be completed within three months of shareholder approval. Following the split, Coforge will have 33.43 crore outstanding shares, compared to the pre-split figure of 6.68 crore.

Coforge signed a 13-year product delivery and artificial intelligence (AI) solutions deal worth $1.56 billion with US-based travel technology firm Sabre Technologies. "This multi-year agreement positions Coforge as a key partner in furthering Sabre’s ability to accelerate product delivery and launch additional innovative AI-enabled solutions, further underscoring the company’s commitment to speed and scale," the company said in a release.

In addition, through its wholly-owned step-down subsidiary, Coforge Technologies Australia Pty Ltd, the tech company is set to acquire TMLabs by purchasing all outstanding shares under a share sale agreement. Coforge will acquire TMLabs for an upfront payment of 20 million Australian dollars, along with an additional earnout amount based on the achievement of certain milestones in revenue and EBITDA for the financial years 2026 and 2027.

TMLabs provides implementation services related to the “ServiceNow” platform and operates primarily in Australia.

Coforge has also signed a stock purchase agreement with Rythmos Inc. The company will pay an upfront consideration of $30 million to Rythmos, with an additional earnout amount payable in two tranches based on the achievement of certain revenue and EBITDA targets for the calendar years 2025 and 2026. The maximum payout earmarked for this is $18.7 million.

Rythmos specialises in data capabilities and has deep expertise in the airline sector, which Coforge views as an opportunity to enhance its data and cloud engineering services.

Both acquisitions are subject to the completion of closing conditions and closing deliverables as per the stock purchase agreement, the company said in an exchange filing.

At the time of writing, the stock was trading at Rs 7,995.50, up 593 points or 8.08% compared to the previous close of Rs 7,212.40 on the NSE.

Coforge shares have surged around 19% in the last six months and over 23% in the last year. Year-to-date, the stock has fallen over 19%, significantly underperforming the benchmark Nifty 50 index, which has fallen nearly 6% in the same period.

In the December 2024 quarter, the company reported a net profit of Rs 215.5 crore, a rise of 6.6% from the September quarter. The company’s revenue grew 8.4% QoQ to Rs 3,318 crore.

Global brokerage Jefferies has maintained a ‘buy’ rating on the stock, raising its target price to Rs 10,350. The brokerage said that the company’s $1.6 billion deal signing enhances revenue visibility for FY26, strengthens its travel vertical presence, and positions it for more large contracts. Jefferies also increased its FY26-FY27 earnings estimates by 3% to 5%.