Coforge shares extended their loss on Thursday following a 5% drop on Wednesday after the company's chairman and non-executive independent director of the board Om Prakash Bhatt resigned ahead of his term ending in April 2027. An internal audit of the board evaluation exercise highlighted discrepancies in the evaluation process, the disclosure of certain material information, and aspects related to the chairman's performance. Vivek Sharma has been appointed the interim chairperson until 31 January 2027.
“While the lack of disclosures, leading to his resignation, was a surprise, it is not a reflection of the company, the board and its practices,” a Nuvama Research report said. "We also find concerns related to the board functioning and/or influence by private equity firms (Advent) as overdone.” Coforge’s largest shareholder, Advent International, had voted against Bhatt’s reappointment at its annual general meeting in August, prompting his resignation.
Coforge clarified that the board evaluation has no bearing on the company’s operations, performance, or guidance. The Street now awaits clarity on the appointment of a permanent chairman. Any change in business strategy following the new appointment would be monitorable. Remember, Coforge targets doubling revenue from a base of around $2.5 billion to $5 billion by FY30.
It expects FY27 to be another industry-leading year of growth. Despite exiting low-margin Indian government and data centre businesses, Coforge delivered sequential constant currency organic revenue growth of 1.1% in the June quarter (Q1FY27), beating expectations.
Coforge expects robust revenue growth Q2 onwards, supported by record deal wins. Order intake was $691 million in Q1 with an executable order book at $2.23 billion, up 44% year-on-year. Coforge struck a $230 million deal, which will be a part of Q2 deal wins.