Coforge's Bold $2.35B Encora Deal: Analysts Warn 'Conditions Apply'

• Coforge acquired US-based Encora for $2.35 billion, aiming for a combined $2.5 billion revenue entity in AI, product engineering, and cloud services.
• Analysts from Kotak, Motilal Oswal, and Nuvama maintain 'buy' ratings but highlight execution challenges and integration risks for the 'pricey' deal.
• DAM Capital raises concerns about the high 4.6x price-to-sales multiple for Encora's lower organic growth (7-8% vs. Coforge's mid-teens).
• Concerns include EPS accretion reliance on specific share swap/amortization, and potential stock pressure from PE shareholders lacking lock-in.
• Nuvama calls it Coforge's 'biggest and boldest' move, accelerating growth, while DAM Capital notes recent stock correction offers valuation comfort.

Why It Matters: Coforge's $2.35B Encora acquisition is bold but analysts stress successful integration and execution are critical.