Coforge

Sept 16 (Reuters) - Coforge Limited COFO.NS:

• COFORGE - ANNOUNCES EXPANDED FOCUS TO OPERATIONALIZE AI FOR HI-TECH ENTERPRISES

• COFORGE - COMBINES AI OPERATING SYSTEM WITH FORWARD DEPLOYED ENGINEERS FOR BUSINESS OUTCOMES

Source text: ID:nBSE7VbDRv

Further company coverage: COFO.NS

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Sept 15 (Reuters) - Coforge Limited COFO.NS:

• EXPANDS AUTOMOTIVE ENGINEERING FOOTPRINT

Source text: ID:nnAZN4TK3MO

Further company coverage: COFO.NS

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Coforge’s board noted the immediate resignation of non-executive independent director and Nomination and Remuneration Committee chair DK Singh on September 11. In his resignation email, Singh cited recent events and differences between independent and executive directors, while the board called that allegation unfounded. An internal audit had found that board-evaluation reports were not shared with other directors and that the chairman’s lowest rating was not discussed before the NRC or board. Vivek Sharma was to serve as interim chair until January 31, 2027, while Beth Boucher was designated NRC chair and the NRC and Stakeholders’ Relationship Committee were reconstituted. The move followed independent chair OP Bhatt’s resignation earlier in the week. Coforge reported FY26 revenue of $1.87 billion and an EBITDA margin of 18.6%.

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Coforge’s board noted the immediate resignation of D K Singh, a non-executive independent director and chair of its Nomination and Remuneration Committee. The company said an internal audit had found that board-evaluation reports were available only to the board chair and NRC chair, and that the board chair’s lowest rating had not been disclosed or discussed with the wider board. Coforge said explanations were sought from the two directors and that Singh’s resignation followed that process. Vivek Sharma was appointed interim chair until January 31, 2027, while Beth Boucher was named NRC chair and the NRC and Stakeholders’ Relationship Committee were reconstituted.

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BENGALURU, Sept 11 - Indian IT services firm Coforge COFO.NS said on Friday that its non-executive independent director, DK Singh, has resigned, citing "differences and tensions" between the firm's independent and executive directors.

The move comes after the company said Om Prakash Bhatt, who resigned as chairman earlier this week, had withheld from the board a finding that he received a low rating in a board evaluation report.

(Reporting by Abinaya V in Bengaluru; Editing by Vijay Kishore)

Sept 10 (Reuters) - IT services firm Coforge COFO.NS said on Thursday that Om Prakash Bhatt, who resigned as chairman earlier this week, withheld from the board a finding that he received a low rating in a board evaluation report.

• Bhatt, a veteran banker who chaired State Bank of India from 2006 to 2011, resigned from Coforge's board on September 8 after an internal audit raised concerns over the handling and presentation of the board evaluation report - which assesses the performance of the board and its members.

• The news had sent shares of the company down nearly 9% on Wednesday.

• Coforge, detailing the findings of the audit in Thursday's statement, said that reports on the board evaluation were made available to Bhatt and the chair of the nomination and remuneration committee (NRC), but not to other members of the board, on Bhatt's instruction.

• The manner in which the reports were presented to the board by Bhatt and the NRC chair "did not cover all relevant aspects and findings," Coforge said, adding that a finding that the chairman's category in the evaluation received the lowest rating was not disclosed or discussed with the board.

• Bhatt could not be immediately reached for comment. In his resignation letter disclosed by Coforge to stock exchanges on Wednesday, Bhatt said he had acted in good faith.

• Coforge added that the internal audit remains ongoing. It named independent director Vivek Sharma as interim chairman until January 31, 2027.

(Reporting by Preetika Parashuraman in Bengaluru; Editing by Shailesh Kuber)

(([email protected];))

Updates for morning trade

By Bharath Rajeswaran and Vivek Kumar M

Sept 9 (Reuters) - Indian shares fell on Wednesday as a fresh escalation in the Middle East conflict had Brent crude hurtling toward $100 per barrel, a pain point for the world's third-largest crude oil importer.

The Nifty 50 .NSEI fell 0.67% to 23,474.4 and the BSE Sensex .BSESN lost 0.83% to 74,954.33 as of 10:01 a.m. IST.

Twelve of the 16 major sectors logged losses.

IT index .NIFTYIT slid 3%, with constituent Coforge COFO.NS tumbling 6% after Chairman Om Prakash Bhatt resigned following concerns raised by an internal audit over the company's board evaluation process.

The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 lost 0.6% and 0.7%, respectively.

The Middle East war intensified on Tuesday with Iranian-backed Houthis in Yemen launching strikes on several Saudi cities, further embroiling a U.S. ally in the conflict, while U.S. forces hit multiple Iranian oil tankers and Iran struck a U.S. base in Jordan.

Brent crude futures LCOc1 jumped 1.5% to $99.5 per barrel. Higher oil prices threaten to widen the trade deficit, fuel inflation, and weigh on growth in India. O/R

"With crude inching towards $100 a barrel, the whole sentiment view changes for the worse for domestic equities after what has been a stable earnings season," said Aman Chowhan, head of equities of Alternates at Abakkus AMC, adding, "Higher crude also brings a potential near-term U.S. rate hike to the table, which is negative for emerging market equities."

"Flows are also getting diverted from secondary markets with IPOs, QIPs hitting the Street every other day, which is compounding the pressure," Chowhan said.

Bucking the trend, Graphite India GRPH.NS climbed over 13% to a near eight-year high after global graphite electrode leader GrafTech International EAF.NS announced a 30% minimum price hike.

Adani Enterprises ADEL.NS gained 3.6% after it agreed to sell up to a 5.54% stake in its airport unit, raising about $1 billion from a group of investors comprising Temasek, BlackRock BLK.N, Premji Invest and Alpha Wave to fund the business.

(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Rashmi Aich and Harikrishnan Nair)

(([email protected];))

Coforge’s independent director and chairperson, O P Bhatt, resigned with immediate effect after an internal audit raised concerns about the handling and presentation of the board evaluation report. The review identified concerns that material information relating to the report and Bhatt’s performance had not been fully disclosed to the board. The board had sought an explanation and was still evaluating it when Bhatt resigned, saying that a continuing disagreement over his good-faith actions would not support effective board functioning. Vivek Sharma, another non-executive independent director, was designated interim chairperson until January 31, 2027. Coforge completed its acquisition of Encora in April 2026 in a transaction valued at $2.35 billion in enterprise value. The deal formed part of the company’s shift towards AI-led engineering and data services.

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Coforge's chairperson and independent director, O P Bhatt, resigned with immediate effect after an internal audit identified concerns about how the board evaluation report and information relating to his performance had been presented to the board. The board had sought an explanation from Bhatt and was still considering his response when he resigned on September 8, while Vivek Sharma was designated interim chair until January 31, 2027. Bhatt said the disagreement over his good-faith actions in the evaluation process made continued service inappropriate, and he also stepped down from board committees. He held an independent directorship at Wockhardt, where he served on its Audit, Stakeholders' Relationship and Capital Raising committees. Coforge reported FY26 revenue of about $1.87 billion and had shifted its business mix towards AI-led engineering after completing the Encora acquisition.

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Sept 9 (Reuters) - IT services firm Coforge COFO.NS said Wednesday Chairman Om Prakash Bhatt resigned after an internal audit into a board evaluation found concerns, including that material information about his own performance had not been fully disclosed to the board.

Bhatt, who previously served as chairman of India's largest lender, State Bank of India, was appointed chair of Coforge's board in 2024 with a term due to finish in April 2027.

An audit into the board evaluation process and the resulting report, which were handled under Bhatt's guidance, identified concerns about how the report "had been dealt with and presented to the board", the company said.

The board raised its concerns with Bhatt and was evaluating his response when Bhatt tendered his resignation on Sept. 8.

The company did not elaborate on the specific nature of the information about Bhatt's performance that had not been disclosed to the board.

In his resignation letter, which was included in the regulatory filing, Bhatt maintained that he had acted in good faith.

"I believe that continuing on the Board while there remains a disagreement considering the characteristics of my good faith actions in the Board evaluation process would not be conducive to the effective functioning of the Board," Bhatt said in the letter.

Coforge named Vivek Sharma, a non-executive independent director, as interim chair until January 31, 2027.

(Reporting by Natalia Bueno Rebolledo in Mexico City; Editing by Tasim Zahid)

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Aug 28 (Reuters) - Coforge Limited COFO.NS:

• COFORGE EXPANDS STRATEGIC PARTNERSHIP WITH PEGA TO ACCELERATE ENTERPRISE AI TRANSFORMATION

Source text: ID:nBw9n6LHYa

Further company coverage: COFO.NS

(([email protected];))

By Sai Ishwarbharath B, Abhirami G and Haripriya Suresh

BENGALURU, August 21 (Reuters) - Artificial intelligence promised to disrupt India's IT industry and it is delivering.

Outsourcing giants like Tata Consultancy Services TCS.NS, Infosys INFY.NS, Wipro WIPR.NS, HCLTech HCLT.NS and Cognizant CTSH.O are rejigging business models, increasingly tying fees to performance outcomes instead of hours worked, as clients demand steep price cuts and more productivity.

Industry executives also say they are losing some work entirely as customers use AI to shift tasks in-house, while all the uncertainty that the new technology has brought is resulting in shorter contracts.

And where once the big IT companies won contracts because they could point to their huge employee base, that has become less and less of an advantage as AI automates more and more tasks — levelling the playing field for smaller rivals which have jumped at opportunities to snatch business.

"It's a desperate market for the service providers. The odds are very much in favour of clients," said Jimit Arora, CEO of research and advisory firm Everest Group.

Software companies globally have been battered by worries that AI will render key parts of their business obsolete, but India's IT industry — worth $315 billion in annual revenue — is the most obvious victim with its traditional reliance on billable hours.

The Nifty IT index .NIFTYIT has tumbled by a fifth this year, with its 10 constituents losing a combined $73 billion in market value.

CONTRACTS SHIFT TO MEASURABLE OUTCOMES

These days, pricing for contracts is more likely to be dictated by performance outcomes.

TCS Chief Executive K Krithivasan told Reuters that about 80% of the company's contracts within its finance, human resources and other business services segment are now based on outcome performance measures.

That number represents a doubling since AI went mainstream in late 2023, said a person with knowledge of the matter, who was not authorised to speak to media and declined to be identified. TCS did not respond to a request for comment.

Other examples in the industry include an AI and automation deal Cognizant CTSH.O struck with Daimler Truck DTGGe.DE in February. It stipulated AI-related cost savings would be split between the vendor and the client, according to people familiar with the terms.

"With AI, the fundamentals are shifting," Cognizant said in a statement to Reuters, though it declined to comment on specific contracts. "Clients now expect more value and measurable outcomes, and we are re-forging our model for that reality."

Daimler Truck did not respond to a request for comment.

A separate multiyear cloud management deal forged in June 2025 was structured so HCLTech will not be paid by German utility E.ON EONGn.DE for the first year, with payments from the second year tied to efficiency gains and specific business outcomes, according to two people familiar with the agreement.

E.ON declined to comment, while HCLTech did not respond to a request for comment.

CLIENTS WANT MORE BANG FOR THEIR BUCK

As AI drives productivity gains, clients have become increasingly vocal about getting more for less.

Persistent Systems PERS.NS CEO Sandeep Kalra told Reuters that the IT provider's clients were demanding the same work for 25% to 30% less while expecting faster delivery and higher productivity.

But on the plus side, AI is helping Persistent win larger deals than it would have previously.

"The demarcation of a scale player only by revenue is not necessarily a big thing today," he said.

IT executives and analysts alike say competition from mid-sized firms has become brutally fierce.

Many customers now want rapid development of pilot programmes and smaller firms are winning mandates by deploying senior leaders quickly and offering flexible pricing, says Phil Fersht, CEO and chief analyst at HFS Research.

"Many Tier 2 firms have been more agile and hungry in this phase," he said.

Both Persistent and Coforge COFO.NS, another mid-sized IT services provider, have seen revenue in dollar terms grow by double digits for at least eight quarters in a row. In April-June, revenue for Persistent surged 16%, while Coforge's sales jumped by a third.

In contrast, TCS, Infosys, Wipro and HCLTech had subdued growth of 1% to 3%.

IRRATIONAL EXUBERANCE?

As pressure from clients grows, some firms are making rash decisions, says Tech Mahindra TEML.NS CEO Mohit Joshi.

Some rivals are factoring in productivity gains of 70% to 80% over five to seven years and guaranteeing prices despite rising chip costs, Joshi told an analysts' call last month, adding that his company had chosen not to take such risks.

"Clearly, there is a ton of competition out there, and our competition at times is doing irrational things," he said.

Infosys last month also told analysts it had walked away from contracts that were no longer economically viable.

TCS's Krithivasan said that so far the company has been able to offset AI-related downward pressure on revenue with new work.

"But how fast and how much more we are able to go ahead of the (revenue) deflation will determine the growth going forward," he added.

TCS is also boosting its numbers of engineers who embed with clients to accelerate AI adoption and is hunting for AI acquisitions.

It is thus far the only Indian IT services provider to have announced mass layoffs in the AI era, implementing cuts of more than 12,000 last year. But companies have flagged that their traditional role as huge hirers of new recruits may be winding down.

The country's IT giants will no longer need large ranks of entry-level engineers, according to former Infosys CFO V. Balakrishnan.

"The pyramid model is gone. With coding agents, we no longer need basic coding," he said.

(Reporting by Sai Ishwarbharath B, Abhirami G and Haripriya Suresh in Bengaluru; Editing by Dhanya Skariachan and Edwina Gibbs)

(([email protected]))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.

By Ujjaini Dutta

BENGALURU, Aug 14 (Reuters Breakingviews) - India's $315 billion IT industry was once easy for investors to read: work was largely billed on human effort, so headcount was a straightforward indicator of revenue growth and earnings potential. That correlation is fraying as AI tools made by Anthropic, OpenAI and others mean IT companies can serve clients with fewer people and increase revenue without hiring. New measures are needed to differentiate between firms adapting fast enough and those who can't keep up.

Traditional contracts paid IT companies for hours worked and engineers deployed. That model is fading fast, especially at smaller and more agile firms. Yet the distinction is not reflected in share prices. Investors have indiscriminately dumped shares in giants led by $90 billion Tata Consultancy Services TCS.NS , Infosys INFY.NS and Wipro WIPR.NS, alongside stakes in smaller providers like Blackstone-backed BX.N Mphasis MBFL.NS. The benchmark Nifty IT index .NIFTYIT is down 17% this year.

Some companies are starting to report "AI revenue". Venu Lambu, the boss of $15 billion LTM LTIM.NS, reckons it will become the industry's defining metric but that seems unlikely. At Tata Consultancy, this newly adopted measure is poorly explained and, worse, lumpy. A more nuanced approach is probably required.

From March next year, $5 billion Mphasis,will report “key operating metrics” such as annual recurring revenue and platform attach rate. This suggests it sees a growing share of future revenue from selling software-like services. The firm already generates less than half of its topline from the traditional "Time and Materials" billable hours model. Similarly, $8.5 billion Coforge is building up a portfolio of AI-related software products and tools including 8 AI platforms, 22 AI assets and over 100 reusable AI agents, per its latest post-earnings call.

AI is not only making engineers more productive; it is also encouraging IT firms to package their expertise into reusable software platforms as clients increasing value speed of deployment. So instead of building a custom customer-service application from scratch, an outsourcer could deploy a pre-built AI platform across dozens of clients and charge subscription fees.. Attach rate would show how often clients purchase additional products or services after adopting a platform, offering a clue about future revenue growth.

This shift to a "services-as-software" model is imminent, says Sanjeev Narsipur, Managing Director and Lead of Digital, AI and Technology Services at Alvarez & Marsal. And as this line blurs globally, AI developers OpenAI and Anthropic are also moving into enterprise services. Whatever the way forward, after decades of falling back on old metrics, IT firms need to find new ways to demonstrate their worth.

Follow Ujjaini Dutta on LinkedIn and X.

CONTEXT NEWS

Blackstone-backed Mphasis sees a shift toward "recurring, platform-attached revenue” the company said on July 24 in a post-earnings call. In May, the company said it would start reporting “key operating metrics” such as annual revenue runrate, platform attach rate and net retention rate for the year ending March 2028.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

Aug 11 (Reuters) - Coforge Limited COFO.NS:

• COFORGE - LAUNCHES PRIVATE EQUITY BUSINESS UNIT

Source text: ID:nBSEY8Jnd

Further company coverage: COFO.NS

(([email protected];))

** CLSA says Coforge'sCOFO.NS strong order book provides upside to brokerage's FY27 revenue estimates

** Raises PT 6% to 2170 rupees, reiterates "high conviction outperform" rating; retains IT firm as top sector pick

** HSBC expects near mid-teen growth in overall business in FY27-29, among highest in its IT coverage; raises PT ~14% to 2000 rupees, maintains "buy"

** BofA expects revenue synergies from Encora acquisition to become more visible by H2, providing the next stock trigger; raises PT 10% to 1900 rupees, maintains "buy"

** Cites Coforge's strong sales, execution, industry specialization and ability to assimilate acquisitions as key strengths

** COFO up 4.4% to ~6-month high of 1760 rupees, extending gains to 4th straight session

(Reporting by Aleef Jahan in Bengaluru)

(([email protected]))

** Shares of Coforge COFO.NS rise 9.2% to 1,667.3 rupees, their highest since Feb. 3

** IT firm's Q1 PAT rises 110% Y/Y as revenue jumps 49%, led by strong growth in the Americas segment

** Over 10.8 mln shares traded, 3.2x the 30-day avg

** Stock rated "buy" on avg by 34 analysts; median PT 1690 rupees - data compiled by LSEG

** Stock up 0.5% YTD

(Reporting by Aleef Jahan in Bengaluru)

(([email protected]))

Coforge has signed a five-year contract valued at over $230 million with a major European client. The engagement will deliver an AI-led transformation programme combining low-code/no-code platforms, AI-powered automation and accelerated software development. The company stated the programme is one of its largest AI-led transformation deals in the region. It will focus on improving the client's operational efficiency, decision-making and speed of delivery at scale.

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July 24 (Reuters) - Coforge Ltd COFO.NS:

• COFORGE- SECURES $230 MILLION PLUS FIVE-YEAR CONTRACT WITH A EUROPEAN CLIENT

Further company coverage: COFO.NS

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** Shares of India's Coforge COFO.NS rise 2.03% to 1,494.5 rupees

** IT services firm outlined plans to double revenue to $5 billion by FY30 at its investor day

ACQUISITIONS AND EXECUTION KEY

** Jefferies ("buy", TP: 1,860 rupees) says Coforge's AI-native delivery model and platform-led offerings position it to win larger, outcome-based deals and sustain profitable growth

** HSBC ("buy", TP: 1,710 rupees) says co may need another acquisition worth more than $500 million by FY28 to achieve its FY30 revenue target, flags integration risks from successive deals

** Emkay ("buy", TP: 1,550 rupees) says about $700 million of co's targeted FY30 revenue expected to come from future acquisitions, while growth momentum expected to pick up from Q2 FY27

** Nomura ("buy", TP: 2,100 rupees) says AI is expanding addressable market for outsourced IT services and could help co nearly double revenue by FY30 through account mining, ecosystem partnerships

(Reporting by Surbhi Misra in Bengaluru)

(([email protected] | X: https://twitter.com/SurbhiMisra_ |;))

June 16 (Reuters) - Coforge Ltd COFO.NS:

• COFORGE - TARGETS $5 BILLION IN REVENUE BY FY30

Source text: [ID:]

Further company coverage: COFO.NS

(([email protected];;))

Updates May 6 story to add responses from Coforge and Mphasis in paragraphs 4, 5 and 6

BENGALURU, May 7 (Reuters) - Indian mid-tier software firm Mphasis MBFL.NS has filed a lawsuit against rival Coforge COFO.NS in a U.S. court, claiming that the latter had hired its executives in violation of contract restrictions and gained access to confidential client information.

In a filing dated March 31, Mphasis sought injunctive relief to prevent Coforge from employing two of its former executives on Charles Schwab accounts - a mutual client of both companies - and from using Mphasis’ confidential data.

It also asked the court to bar former Vice President Brijesh Khergamker, who is named as a party in the matter, from working in Charles Schwab's outsourcing operations through Coforge for a year or accepting business from Mphasis customers as it violated his employment contract.

Coforge denied all allegations of wrongdoing and said it intends to vigorously defend itself and the employee in the matter, according to an emailed statement on Wednesday.

The company added that it is also evaluating potential counterclaims, and said that the client mentioned in the complaint has been an existing client for many years, with which it intends to grow its business relationship.

In response to a request for comment, Mphasis said on Thursday that its top priority is to protect its clients and that it would take the necessary action to enforce its rights when left with no other conciliatory alternatives.

Indian newspaper Mint first reported the development on Wednesday. Although dated March, the filing appeared in the government's legal database only last week.

Mphasis also sought compensatory damages and reimbursement of attorney fees and related costs, according to the filing, which did not provide further details.

Mphasis said that Coforge gained an "unfair competitive advantage" in the delivery of IT services by hiring at least four senior-level employees mentioned in the filing.

As demand for Indian IT services has slowed and competition intensified in recent years, companies have increasingly sued executives for violating their employment contracts.

Early last year, Infosys INFY.NS, India's second-largest IT firm, filed a counterclaim against rival Cognizant CTSH.O, saying that the U.S.-based company was engaging in anti-competitive practices and poaching key executives.

In 2023, Wipro sued former Chief Financial Officer Jatin Dalal after he joined Cognizant, claiming that the move violated the terms of his employment contract.

(Reporting by Sai Ishwarbharath B; Editing by Sonia Cheema)

(([email protected];))

BENGALURU, May 6 (Reuters) - Indian mid-tier software firm Mphasis MBFL.NS has filed a lawsuit against rival Coforge COFO.NS in a U.S. court, claiming that the latter had hired its executives in violation of contract restrictions and gained access to confidential client information.

In a filing dated March 31, Mphasis sought injunctive relief to prevent Coforge from employing two of its former executives on Charles Schwab accounts - a mutual client of both companies - and from using Mphasis’ confidential data.

It also asked the court to bar former Vice President Brijesh Khergamker, who is named as a party in the case, from working in Charles Schwab's outsourcing operations through Coforge for a year or accepting business from Mphasis customers as it violated his employment contract.

Coforge and Mphasis did not immediately respond to Reuters' requests for comment.

Indian newspaper Mint first reported the development on Wednesday. Although dated March, the filing appeared in the government's legal database only last week.

Mphasis also sought compensatory damages and reimbursement of attorney fees and related costs, according to the filing, which did not provide further details.

Mphasis said that Coforge gained an "unfair competitive advantage" in the delivery of IT services by hiring at least four senior-level employees mentioned in the filing.

As demand for Indian IT services has slowed and competition intensified in recent years, companies have increasingly sued executives for violating their employment contracts.

Early last year, Infosys INFY.NS, India's second-largest IT firm, filed a counterclaim against rival Cognizant CTSH.O, saying that the U.S.-based company was engaging in anti-competitive practices and poaching key executives.

In 2023, Wipro sued former Chief Financial Officer Jatin Dalal after he joined Cognizant, claiming that the move violated the terms of his employment contract.

(Reporting by Sai Ishwarbharath B; Editing by Sonia Cheema)

(([email protected];))

May 5 (Reuters) - Coforge Ltd COFO.NS:

• COFORGE Q4 CONSOL NET PROFIT 6.12 BILLION RUPEES

• COFORGE Q4 CONSOL REVENUE FROM OPERATIONS 44.50 BILLION RUPEES

Further company coverage: COFO.NS

(([email protected];))

April 13 (Reuters) - Coforge Ltd COFO.NS:

• SECURES ALL REGULATORY APPROVALS FOR ENCORA ACQUISITION

• COMBINED ENTITY TO OPERATE AT ABOUT $2.5 BILLION RUN RATE

Source text: ID:nBSE48hdtB

Further company coverage: COFO.NS

(([email protected];;))

** Shares of Coforge COFO.NS jump more than 6.5% to 1,232.40 rupees, after rising a record 6.97% intra-day earlier

** Top gainer on Nifty IT .NIFTYIT index, which is up 2.47%; among top weekly performers on index

** IT services provider partners with Solstice Innovations to accelerate adoption of agentic AI-led core technology for property and casualty insurers

** Says partnership combines Coforge's Forge-X delivery platform with Solstice's Equinox core insurance system to help insurers transition from legacy platforms faster

** Trading volume at 4.45 mln shares vs 30-day avg of 3.69 mln

** Stock rated "buy" on avg by 33 analysts, median PT 1,925 rupees - data compiled by LSEG

** YTD, stock down around 31%, Nifty IT down nearly 20%

(Reporting by Surbhi Misra in Bengaluru)

(([email protected] | X: https://twitter.com/SurbhiMisra_ |;))

** IT services provider receives RBI approval for an overseas investment exceeding $1 billion to complete its $2.35 billion acquisition of US AI firm Encora

** Shares of Coforge COFO.NS rise 3.8% to 1,157.10 rupees

** Deal was initially announced in December 2025, subject to regulatory approval

** COFO funded the $1.89 billion equity value of the deal through the issue of preference shares at 1,815.91 rupees apiece, while Encora shareholders will receive a 20% stake in the combined firm

** Encora is backed by Advent International and Warburg Pincus. Co offers AI solutions for product, cloud and data engineering

** Analysts have a "buy" rating on avg for COFO; median PT is 1,925 rupees - data compiled by LSEG

** YTD, COFO dowm ~30%

(Reporting by Urvi Dugar in Bengaluru)

(([email protected];))

** Coforge COFO.NS rises ~3.7% to 1150.7 rupees

** CLSA reiterates "high-conviction outperform" rating after hosting co's management to discuss AI narrative in IT sector

** PT of 2,278 rupees implies 105% potential upside

** CLSA says co will be "clear winner in the upcoming AI cycle"

** Adds co's Encora acquisition will have revenue and cost synergies, bolster co's data, cloud, AI-led engineering capabilities

** Stock rated "buy" on avg; median PT is 1,985 rupees, per data compiled by LSEG

** YTD, COFO down 31% vs IT index's .NIFTYIT 21% drop

(Reporting by Bharath Rajeswaran in Bengaluru)

(([email protected]; +91 9769003463;))

** UBS initiates coverage on IT firm Coforge COFO.NS with "neutral" rating, PT of 1,240 rupees

** Brokerage highlights 15% annual revenue CAGR over FY26-FY28, driven by organic growth, acquisitions

** However, flags concerns over acquisitive strategy, weaker GenAI positioning vs peers

** Recent Encora acquisition at stretched valuations will weigh on shares despite adding capabilities, geographic diversification - UBS

**Notes AI positioning ahead of large-caps but trails midcap peers like Persistent Systems PERS.NS, LTIMindtree LTIM.NS due to limited exposure to AI-intensive verticals (consumer, hi-tech), lower Americas presence

** Stock rated "Buy" on average by 32 analysts; median PT 1,985 rupees - data compiled by LSEG

** COFO down 0.4% to 1085 rupees; YTD, down 34.5%

(Reporting by Mridula Kumar in Bengaluru)

(([email protected];))

By Bharath Rajeswaran

Feb 25 (Reuters) - Indian shares have lagged their Asian and emerging market peers so far in February, pressured by a $68.6 billion rout in the market value of information technology stocks, as investors fretted over disruptions linked to artificial intelligence.

The Nifty 50 index .NSEI has risen 0.4% so far this month, while the Sensex .BSESN edged 0.1% lower, underperforming both the MSCI Asia ex-Japan and MSCI Emerging Markets indexes.

The 10 Nifty IT constituents .NIFTYIT have lost a combined $68.6 billion in market capitalisation in February, as of the last close, with the index down 21% and on course for its worst monthly performance in nearly 23 years.

All 10 index members have fallen between 16.8% and 27% in February to date. Coforge COFO.NS is the steepest percentage decliner, down 26.8%, while Tata Consultancy Services TCS.NS and Infosys INFY.NS have led the value erosion, losing about $21.9 billion and $16.3 billion in market value, respectively.

The selloff reflects growing concerns that rapidly advancing automation tools could compress project timelines and disrupt the labour-intensive delivery model underpinning India's roughly $300-billion IT services industry.

Investors have zeroed in on the AI-driven automation push from U.S. firms such as Anthropic and Palantir, heightening concerns over faster project execution, pricing pressure and reduced billable hours.

Brokerages warn the Indian IT sector could face further pressure if AI starts to eat into application services revenue, which typically accounts for 40% to 70% of total revenue for these companies.

"There are no easy answers to whether AI eventually renders IT services obsolete over the long term," said analysts led by Abhishek Pathak of Motilal Oswal.

"The narrative that AI is coming for not just IT but large swathes of the economy could be too strong to shake, at least in the short term," Motilal Oswal analysts said.

A slowdown or contraction in India's IT sector, whether through layoffs or reduced hiring, can have immediate consequences on both residential and commercial real estate demand. The Nifty Realty index .NIFTYREAL has risen roughly 2% in February, following a nearly 18% decline over the past three months.

Concerns over Indian IT companies have also accelerated foreign selling in the sector in 2026 so far.

While FPIs have turned buyers of Indian stocks in February on an overall basis, they pulled out about 110 billion rupees ($1.21 billion) from IT stocks in the first half of February, following a record 750 billion rupees of net selling in 2025.

($1 = 90.8980 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips)

(([email protected]; +91 9769003463;))

** The recent correction in India's information technology sector presents an added buying opportunity, according to brokerage CLSA

** Indian IT stocks .NIFTYIT lost 12.5% in 2025, emerging as the biggest drag in benchmark indexes, which underperformed Asian and emerging-market peers

** The decline was triggered by record foreign outflows of $8.5 billion from the sector, muted corporate earnings and persistent weakness in U.S. client spending, the sector's primary revenue engine

** The pressure has intensified in 2026, with the IT index down 7% so far, amid rising concerns that advances in artificial intelligence, including new tools from U.S.-based Anthropic, could sharply compress software development cycles

** CLSA, however, downplays near-term disruption risks, arguing that enterprise technology ecosystems often take years to meaningfully adapt to new waves of innovation

** While the sector has weathered multiple disruptive narratives in the past, earnings have rarely suffered lasting damage, according to the brokerage

** CLSA favours mid-tier players Persistent Systems PERS.NS and Coforge COFO.NS, saying their agility positions them to capture emerging profit pools in the next technology cycle

(Reporting by Bharath Rajeswaran in Bengaluru)

(([email protected]; +91 9769003463;))