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Informist, Monday, Dec. 29, 2025                                      Tel +91 (22) 6985-4000

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Equity Alert: Brokerages largely positive on Coforge's stake buy in Encora

 

MUMBAI--0902 IST--Brokerages remain largely positive on Coforge's acquisition of US-based artificial intelligence software engineering firm Encora. The acquisition is expected to accelerate Coforge's shift toward higher-value, artificial intelligence-led engineering services, according to brokerage reports. However, some brokerages see near-term challenges due to execution risks, funding structure, and further potential equity dilution. 

 

Coforge Friday announced the acquisition of 100% stake in Encora from Advent International, Warburg Pincus, and other minority shareholders in an all-stock transaction, according to an exchange filing. The transaction values Encora at an enterprise value of $2.35 billion, which includes equity consideration of $1.89 billion to be paid through a preferential allotment of 93.8 million shares in Coforge to Encora Holdco and AI Altius Parent. The management has guided the acquisition to be earnings per share-accretive in 2026-27 (Apr-Mar). 

 

Coforge expects the combined business to operate at an earnings before interest margin of 14%. "The new US$2.5Bn ($2.5 billion) firm, with a US$2Bn ($2 billion) enterprise core of AI-led Engineering, Data and Cloud services, will set the benchmark on making the promise of AI real for enterprises," Coforge's Chief Executive Officer and Executive Director Sudhir Singh said in a statement. It expects the acquisition to immediately scale its 'hi-tech' and healthcare verticals, expand its nearshore delivery capabilities in Latin America, and increase its client footprint in the western and midwestern regions of the US.

 

"With USD600mn ($600 million) revenue (30% of Coforge), Encora is Coforge's biggest and boldest bet yet. We like the acquisition and transaction structure and see Encora further accelerating Coforge's growth," Nuvama Institutional Equities said in a report on Saturday. This will enhance the near-shore delivery through Encora's around 3,100 Latin America workforce serving US clients, Nuvama said. Further, a stronger presence in the US West and Midwest is expected to drive around a 50% jump in Coforge's North America revenue and the number of $10 million-plus scalable client relationships is expected to rise to 45, the brokerage said. 

 

"While we acknowledge the strategic rationale, we view the acquisition valuation as demanding, given Encora's high single-digit organic revenue growth over the past two years," Emkay Global said in a report. While the brokerage sees near-term overhang on the stock due to execution risks and further potential equity dilution, the company's execution track record provides some comfort, it said. "Near-term earnings are likely to be diluted on an as-is basis," brokerage Morgan Stanley was cited as saying in an NDTV Profit report. Any material weakness in the stock could offer a long-term accumulation opportunity, Morgan Stanley said. Global brokerage Jefferies expects that the successful execution of the deal could lead to a valuation re-rating, NDTV Profit reported, citing the brokerage. (Arya S. Biju)

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Equity Alert: Indices seen in range, volatile ahead of Nifty 50 F&O expiry

 

MUMBAI--0840 IST--Benchmark equity indices are likely to remain confined to a thin range on Monday due to lack of fresh triggers. Moreover, trading activity is expected to be low after a holiday-shortened week and ahead of the New Year, analysts said. The domestic market may also take cues from its global peers.

 

The depreciating rupee and continued outflows of foreign investments from Indian equities have been exerting pressure on the market. However, analysts expect volatility in the rupee to ease and the currency to settle at 88.0-88.5 per dollar in the coming sessions. Corporate earnings for the December quarter are seen driving the equity market and bringing back foreign investments, according to analysts.

 

The GIFT Nifty's December contract suggests a slow start for the market. At 0825 IST, the contract was just 18 points below its previous close at 26089 points and a mere 47 points over the Nifty 50's close on Friday. The January contract of the GIFT Nifty was 9 points lower from previous close at 26265.50 points at 0825 IST.

 

The Nifty 50 ended at 26042.30 points, down 99.80 points or 0.4% on Friday. Support for the Nifty 50 is pegged at 25950 points and resistance at 26150-26230 points on Monday, Vipin Kumaar, derivatives and technical analyst at Globe Capital Market, said. So far, expiry of the December contract is seen at 25850-26230 points, he said.

 

US indices closed marginally lower Friday, while Asian indices were mixed in early trade on Monday. Indices in Japan were down after the summary points of Bank of Japan's latest monetary policy meeting hinted at further rate hikes going ahead. At the December meeting, the central bank raised the key interest rate by 25 basis points on Friday to a three-decade high, as widely expected.  (Simran Rede)

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Equity Alert: Asian indices broadly higher, Nikkei snaps two-day winning run

 

MUMBAI--0824 IST--Asian equity indices traded broadly higher on Monday. Japan's Nikkei index fell, snapping a two-day wining streak. The index was down nearly 0.4%. South Korea's Kospi index rose due to optimism around semiconductor stocks. 

 

Shares of Samsung Electronics Co. Ltd. rose over 1% on the South Korean index, with SK Hynix Inc. rising nearly 5%. Shares of SK Hynix rose after the Korea Exchange lifted its warning on the stock for 10 trading sessions from Dec. 11 following sharp gains, according to a report by Yonhap news agency. Taiwanese index TAIEX rose 0.8% to 28774.43 points on Monday, reaching its yearly high of 28788.64 points. The index has been trading higher for six consecutive sessions during which it has gained nearly 5%. The Chinese CSI 300 index was up for the seventh consecutive session, gaining nearly 3% during the period.   

 

Following were the levels of key Asian indices at 0824 IST: 

 

Level	Last	Change in %
IDX Composite	8589.996	0.61
S P/ ASX 200 INDEX	8756.30	(-)0.07
TAIEX	28774.43	0.76
SSE Composite Index	3978.57	0.38
Nikkei 225 Day	50550.17	(-)0.39
KOSPI	4186.74	1.38
CSI 300 Index	4662.23	0.11

 

(Akshat Saksena)

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Equity Alert: US indices close tad lower Fri; S&P 500 hits record high

 

MUMBAI--0732 IST--US equity indices ended slightly lower Friday, with the S&P 500 index closing lower after hitting a new all-time high of 6945.770 points. The index snapped a five-day winning streak in which it gained over 3%. The indices are seeing what is known as a Santa Claus rally, in which indices see a surge between the last five trading days of a year and the first two days of the new year. 

 

"People are taking profits here and there, or buying on lows, but there's not a lot of information. You're not getting corporate profit results. You're not getting a lot of economic data, so it's probably just more technicals and positioning heading into here," Tom Hainlin, national investment strategist at US Bank Asset Management, was cited as saying in a report by CNBC. According to Hainlin, the broadening seen by the markets was a trade in play for the new year, with the record high seen by the S&P 500 index due to a push in cyclical areas, financials and industrials, rather than technology stocks. 

 

"We had a very strong five-day rally, so in a way we're just simply catching our breath today after the holiday," Ryan Detrick, chief market strategist at Carson Group in Omaha, was cited as saying in a report by Reuters. "There are still a few days left for the Santa Claus rally, so there is still a more upward bias going forward," Detrick said.

 

The three major indices are on track to record double-digit percentage gains for the year, led by the NASDAQ, the report said. This, Detrick said, was a reminder that volatility was the price needed to be paid for the solid gains seen in the last three years.  

 

Following are the closing levels of US indices Friday:

 

Index	Level	Change in %
S&P 500	6929.94	(-)0.03
NASDAQ Composite	23593.097	(-)0.09
Dow Jones Industrial Average	48710.97	(-)0.04

 

(Akshat Saksena)

 

US$1 = INR 89.94

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

All prices from National Stock Exchange, unless otherwise specified.

All percentage changes for share prices are rounded off to the nearest whole number; percentage changes for index values are rounded off to one decimal place.

All times are Indian Standard Time.

 

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