Fund Managers Caution on Coforge-Encora Deal Amid Weak IT Outlook

• Fund managers express reservations about Coforge's all-stock acquisition of Encora, citing elevated valuation and integration risks.
• Sandip Agarwal and Bhavin Shah highlight the limited success record of such deals and Coforge using its highly-priced stock.
• Both experts currently do not hold Coforge shares and have no immediate plans to invest due to high valuation and pessimistic sector outlook.
• Agarwal forecasts restrained IT sector growth (large-cap 5-7%, mid-cap ER&D 10-12%) due to AI's impact on effort reduction.
• Skepticism exists regarding M&A as a growth driver, with experts suggesting acceptance of lower growth rates in a maturing IT industry.

Why It Matters: Experts warn Coforge's Encora deal faces high execution risk and valuation concerns amid a weak IT growth forecast.