Coforge shares rise 2% as Nuvama, other brokerages say concerns around Chairman's resignation are overdone

Shares of Coforge rose nearly 2% on Thursday as brokerages reaffirmed their positive calls for the stock and said concerns around Chairman Om Prakash Bhatt’s resignation following an internal audit are overdone.

Coforge shares rose to Rs 1,878 apiece on NSE on Thursday morning. This comes after the stock plunged more than 5% on Wednesday after the company announced the resignation of non-executive Independent Director and Chairperson Om Prakash Bhatt with immediate effect.

As part of the internal audit plan, Coforge’s internal auditor reviewed the process followed for the Board Evaluation Exercise under the Chairman's guidance and the resulting Board Evaluation Report (BER). The review found some 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 shared its concerns with 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.

Also read | Coforge shares crash after Chairman Om Prakash Bhatt resigns post audit

In his resignation letter, Bhatt said he carefully considered the matters, 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.

Nuvama on Coforge share price

Nuvama highlighted that Om Prakash Bhatt’s tenure was anyway coming to an end, as the renewal was not approved by shareholders in the recent AGM. Vivek Sharma, a Non-Executive Independent Director, has been appointed as Interim Chairperson till January 31, 2027. The brokerage sees no impact on the business or financials of the company.

“We also do not see any concern related to the functioning of the board, as the matter relates to disclosure and process concerns, which are not from the Board’s side,” Nuvama said, adding that it stays positive on the Coforge story. It retained its ‘Buy’ call on the stock with a target price of Rs 2,350 apiece, implying more than 27% upside potential from the stock’s previous closing price of Rs 1,845 apiece.

Also read | Key Coforge shareholders were against OP Bhatt’s reappointment

Motilal Oswal on Coforge share price

Motilal Oswal Financial Services also noted that Bhatt’s term was anyway ending, and his resignation appears to have been voluntary and initiated by him given that his term was nearing its end. “We see limited implications for the underlying business as of now and await more clarity on the permanent appointment of the new chair. We therefore do not change our business outlook at this stage,” the domestic brokerage said.

“We have kept our estimates unchanged following this development. We continue to expect Coforge to be the growth leader within our coverage universe and reiterate it as our top pick. Strong deal wins, continued execution, improving cash conversion, and further margin upside from the Encora integration support our medium-term growth outlook,” Motilal Oswal said, as it reiterated its ‘Buy’ call on the stock with a target price of Rs 2,200 apiece, implying more than 19% upside potential.

Coforge share price

Coforge shares have gained 2% in a month and 11% so far in 2026. The stock has gained 4% in one year despite AI worries and rate hike concerns keeping sentiment muted for IT stocks.

In the longer term, Coforge shares have jumped 66% in three years and 80% in five years. The company has a market capitalisation of Rs 81,426 crore.

Also read | Coforge shares double from March low, outperform Nifty IT peers. Is more steam left in the rally?

Disclosure: "This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The EconomicTimes Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment."