Shares of Coforge declined as much as 9% to their day's low of Rs 1,780 on the BSE on Wednesday after the company announced resignation of non-executive Independent Director and Chairperson Om Prakash Bhatt with immediate effect on September 8, 2026.
As part of the internal audit plan for Q2 FY26, the company’s internal auditor reviewed, among other matters, the process followed for the Board Evaluation Exercise under the Chairman's guidance and the resulting Board Evaluation Report (BER) that the Chairman presented to the board.
Also read: Coforge shares double from March low, outperform Nifty IT peers. Is more steam left in the rally?
The review identified certain concerns regarding how the board dealt with and presented the BER. This included concerns that certain material information relating to the BER and the chairman's performance was not fully disclosed to the board when the BER was presented.
Following the observations, the board communicated its concerns to the chairman and sought an explanation regarding the identified matters. Bhatt provided his response, after which the board began considering and evaluating his explanation. The board had not made a final decision on the matters raised with him.
The company stated that while Bhatt claimed he acted in good faith, he tendered his resignation from the Board with immediate effect on September 8, 2026. Coforge clarified that Bhatt's resignation followed the concerns identified in the internal audit review and the subsequent process the board undertook to seek and consider his explanation.
In his resignation letter, Bhatt said he carefully considered the matters raised concerning the Board evaluation process, his response to those matters and the resulting circumstances. He said it was only appropriate for him to resign from the Board with immediate effect.
Bhatt said continuing on the board while there remained a disagreement over the characteristics of his good faith actions in the board evaluation process would not be conducive to the board's effective functioning.
Coforge shares have continued to deliver strong returns for shareholders, as the stock rallied more than 100% in less than six months from a 52-week low in March to hit a fresh 52-week high last week.
The sharp surge comes amid artificial intelligence worries and inflationary pressures that kept IT investors on the edge this year.
In the longer term, Coforge shares have delivered positive returns of 72% in three years and 86% in five years.
In July, Coforge reported a 63% year-on-year (YoY) jump in net profit for the first quarter of financial year 2027 to Rs. 518.6 crore. Revenue for the April-June quarter grew nearly 50% YoY to Rs. 5,528 crore during the quarter under review.
Read more: Coforge’s strong order book and execution point to better margins and growth
Sudhir Singh, chief executive officer of Coforge, said that the narrative of AI-led deflation "is real in the managed services book of business," but the company is also seeing AI-led demand tailwinds. "Now, organisations that are pivoting hard and with speed can more than offset the deflation because of AI and demand,” he said.
