Indian IT Firm Coforge Soars on $1.56 Billion Deal with Sabre

Indian IT firm Coforge Limited has seen a significant boost in its stock price following the announcement of a $1.56 billion, 13-year deal with global travel technology company Sabre Corporation. This multi-year agreement, signed on March 4, 2025, positions Coforge as a key partner in accelerating Sabre's product roadmap and enhancing its AI capabilities. The deal is set to strengthen Coforge's presence in the travel technology vertical and drive growth for the company.



The partnership between Coforge and Sabre is a strategic move that aligns with the current market trends and positions both companies for future growth. Sabre, a leading global travel technology provider, seeks to leverage Coforge's expertise in AI and digital solutions to drive innovation and transformation in the travel industry. In turn, Coforge gains access to Sabre's extensive global market and strengthens its position in the travel technology sector.

The deal is expected to significantly impact Coforge's revenue growth trajectory. According to Morgan Stanley, assuming the deal starts contributing to Coforge's revenue from the first quarter of FY2026, it could add $80 million to $120 million in incremental revenue in the next financial year, representing a 5% to 8% growth. Kotak Institutional Equities also mentioned that the revenues from this engagement could be front-ended, further boosting Coforge's revenue growth.

However, there are potential risks associated with this deal. Kotak Institutional Equities highlighted that Sabre is currently undergoing a transition phase and has a weak financial position, which could pose risks to the deal's success. Additionally, JPMorgan suspects that the deal could be slightly margin dilutive, with a potential hit of 10 to 20 basis points on Coforge's overall margin. Despite these risks, the deal is seen as an attractive opportunity by analysts, with Morgan Stanley and JPMorgan maintaining "overweight" ratings on Coforge's stock and upgrading their price targets to reflect the potential upside.

In addition to the Sabre deal, Coforge has also announced two acquisitions: Rythmos Inc. and TMLabs Pty Ltd. These acquisitions complement Coforge's existing service offerings by strengthening its data and cloud engineering capabilities and expanding its presence in the travel and airline sectors. The acquisition of Rythmos, a company specializing in data capabilities and airline industry expertise, will help Coforge enhance its data practice and cloud engineering services. Meanwhile, the acquisition of TMLabs, a provider of implementation services for the "ServiceNow" platform, will enable Coforge to expand its presence in the Australian market and strengthen its service offerings.

These strategic moves by Coforge demonstrate the company's commitment to driving growth and maintaining a competitive edge in the global IT services market. By leveraging its expertise in AI and digital solutions, Coforge is well-positioned to capitalize on the growing demand for innovative and transformative solutions in the travel industry. As the company continues to expand its service offerings and strengthen its market presence, investors can expect to see significant growth and value creation in the coming years.