Coforge shares tumble 9%: What's behind the sudden fall?

The stock has remained in focus this year amid concerns around artificial intelligence and inflation, which have kept investors cautious about the IT sector.

In Short

• Coforge shares dropped 9% after chairman Om Prakash Bhatt resigned.
• Bhatt resigned over concerns from an internal audit on board evaluation.
• Audit found possible non-disclosure of material information by Bhatt.

Coforge shares fell sharply on Wednesday after the company announced the resignation of its chairman and non-executive independent director, Om Prakash Bhatt, following concerns raised in an internal audit.

The stock fell as much as 9% to Rs 1,780 on the BSE during the session. At the time of writing, Coforge shares were trading 4.74% lower at Rs 1,856.70.

Bhatt resigned from the board with immediate effect on September 8, 2026.

WHY DID OM PRAKASH BHATT RESIGN?

The resignation followed an internal audit carried out as part of Coforge’s audit plan for the second quarter of FY27. The review examined, among other things, the process used for the board evaluation exercise conducted under Bhatt’s guidance.

The audit raised concerns about how the board evaluation report was handled and presented to the board. In particular, it found that some material information linked to the report and Bhatt’s performance may not have been fully disclosed when the report was presented.

Following the findings, the board raised the concerns with Bhatt and sought his explanation. He submitted his response, after which the board began reviewing it. However, the board had not reached a final decision on the issues when Bhatt resigned.

Coforge said Bhatt maintained that he had acted in good faith. However, he decided to step down after considering the concerns raised, his response and the circumstances that followed.

In his resignation letter, Bhatt said continuing on the board while there was a disagreement over the nature of his actions in the board evaluation process could affect the board’s effective functioning.

The resignation comes after a strong run for Coforge shares. The stock had gained more than 100% in less than six months from its 52-week low in March and touched a fresh 52-week high last week.

The stock has remained in focus this year amid concerns around artificial intelligence and inflation, which have kept investors cautious about the IT sector.

Despite Wednesday’s fall, Coforge has delivered strong returns over a longer period. Its shares have gained around 72% in three years and 86% in five years.

The company reported a strong first quarter for FY27 in July. Its net profit rose 63% year-on-year to Rs 518.6 crore, while revenue increased nearly 50% to Rs 5,528 crore.

Coforge has also highlighted both risks and opportunities from the growing use of artificial intelligence. While AI could put pressure on some managed services businesses, the company expects stronger demand from organisations that are adopting the technology quickly.

The sharp fall in the stock on Wednesday therefore comes at a time when investors are already closely watching the company’s growth prospects and its response to the changing IT services landscape.

- Ends