Coforge chairman quits; shares fall 8.7% intraday

Coforge Limited's chairman O P Bhatt resigned on 9 September and the stock fell as much as 8.7 percent to Rs 1,780.70 from Rs 1,950. A new chair is in place, but the 1 October NSE close is 6.4 percent below Rs 1,950. Board events: - 9 Sep: Bhatt quit; Coforge cites an audit finding that material information on his board evaluation was not fully disclosed - Coforge says the matter has no connection with its financial statements - Independent director D K Singh quit days later citing "differences and tension" with executives; Coforge called that unfounded - Akhil Gupta, ex Bharti Enterprises, is chair from 29 Sep, subject to shareholder approval Q1 FY27 (27 July): EBIT margin 16.0 percent against FY27 guidance of 15.5 percent or more, with Encora consolidated from 1 May. Coforge [][***** shares closed at Rs 1,804.03 on 1 October on StockGro (NSE Rs 1,826.00), 9.7 percent below the 52-week high. My view: hold, not a fresh entry. Coforge calls this board process, not accounts; I cannot verify that. A second independent director quitting within days worries me: a new chair fills the seat, not the question of why two left. JPMorgan is Overweight, but its Rs 1,850 target is 1.3 percent above Thursday's close. Holders stay into Q2 FY27 results (date not yet out; last year 24 October). Fresh money waits for the first full Encora quarter: consolidated EBIT margin of 16 percent or more, no further board exits. I would then accumulate in the Rs 1,780 to 1,810 zone Kundan Motwani flagged on 3 October. My exit is another independent director resigning, or a Q2 margin below 15.5 percent. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.