COFORGE vs PERSISTENT
Side-by-side comparison of Coforge Ltd. and Persistent Systems Ltd.. Descriptive only — not investment advice.
Coforge Ltd.
IT
Quality Score: 65/100
Persistent Systems Ltd.
IT
Quality Score: 66/100
At a glance
| Metric | COFORGE | PERSISTENT |
|---|---|---|
| Quality Score | 65/100 | 66/100 |
| P/E (trailing) | 31.2 | 43.2 |
| Forward P/E | 20.1 | 29.3 |
| ROE | +18.6% | +26.4% |
| Profit margin | +9.5% | +12.7% |
| Debt-to-equity | 7.52 | 6.09 |
| Dividend yield | +1.17% | +0.86% |
| 1Y price return | -7.0% | -6.3% |
| From 52w high | -31.1% | -22.1% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 1.78 | — |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
Coforge is a mid-cap IT services company trading at ₹1,368, down 31.1% from its 52-week high and 7.0% over the past year, while sitting 14.7% above its 50-DMA. The company posted 5-year revenue and earnings CAGRs of 30.5% and 134% respectively, but carries a debt-to-equity ratio of 7.52, elevated primarily by a $550M loan to fund the $2.5B Encora acquisition. Trailing PE of 31.2x is the highest among its tracked IT peers, while forward PE compresses to 20.1x on consensus estimates.
Persistent Systems (PERSISTENT) is an NSE-listed IT services company currently priced at 5,124.9 with a trailing PE of 43.2 — the highest among its 6 tracked IT peers — and a forward PE of 29.3 on anticipated earnings delivery. The stock trades 7.5% below its 200-DMA and is down 22.1% from its 52-week high, following a Q4 FY26 net profit of 529 crore that missed analyst estimates, prompting target cuts citing rich valuations. Over 5 years, the company has compounded revenue at 25.1% and earnings at 32.1% annually, and holds the top quality score (61) in its peer group.
Pros
- ✓5-year revenue CAGR of 30.5% and earnings CAGR of 134% place Coforge among the faster-growing mid-cap IT names in the peer set; Q4 net profit more than doubled YoY.
- ✓Quality score of 60 ranks 1st of 6 tracked IT sector peers, ahead of TCS (59), Infosys (60 tied), HCLTech (40), Tech Mahindra (46), and Wipro (46).
- ✓FCF was positive in 4 of the available measurement years, and consistency score stands at 76, indicating reasonably stable financial outputs relative to the measurement history.
- ✓Forward PE of 20.1x represents a 35.5% compression from the trailing PE of 31.2x, reflecting market expectations of meaningful earnings expansion over the next 12 months.
- ✓5-year earnings CAGR of 32.1% and revenue CAGR of 25.1% represent consistent compounding above the IT sector median over the measurement period.
- ✓Quality score of 61 ranks 1st among 6 tracked IT peers (HCLTECH 40, INFY 60, TCS 59, TECHM 46, WIPRO 46), with a fundamentals consistency score of 98.
- ✓ROE of 26.35% ranks 3rd of 6 in the peer group; FCF has been positive in 4 of 4 tracked years and debt trend is reported as falling.
- ✓Forward PE of 29.3 represents a 32% compression from trailing PE of 43.2, implying the market is pricing in significant near-term earnings growth.
Cons
- ✗Debt-to-equity of 7.52 is materially above what is typical for an asset-light IT services business; the $550M acquisition loan for Encora has accelerated a rising debt trend, with integration execution now a key variable for balance sheet trajectory.
- ✗Price is 13.5% below the 200-DMA at ₹1,368 vs ₹1,584 and has been in a 31.1% drawdown from the 52-week high, reflecting sustained selling pressure over the medium term.
- ✗ROE of 18.6% ranks 4th of 6 IT peers and has exceeded 15% in only 3 of the tracked historical years, with TCS (48.4%) and Infosys (31.4%) significantly ahead on this capital-efficiency metric.
- ✗Profit margin of 9.48% and trailing PE of 31.2x — the highest in the peer group — create a narrow margin of safety; any slowdown in earnings growth could accelerate valuation de-rating given the premium multiple.
- ✗Trailing PE of 43.2 is the highest in the 6-peer IT group, placing PERSISTENT at rank 6 of 6 on current valuation; premium to peers such as INFY (15.6) and TCS (17.4) is material.
- ✗Debt-to-equity of 6.09 is atypically elevated for an IT services business where peers generally operate with near-zero leverage; the falling debt trend does not yet resolve the structural gap.
- ✗Price is 7.5% below the 200-DMA (5,549.5) and down 14.3% over the past 3 months, with the 52-week drawdown at 22.1% — an extended period of underperformance relative to recent fundamental history.
- ✗Q4 FY26 net profit of 529 crore missed estimates, triggering analyst target reductions and negative news sentiment (3 negative, 0 positive of 8 recent articles), suggesting near-term execution risk is being re-priced.
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