Coforge shares rise 2% after firm appoints Akhil Kumar Gupta as chairman post OP Bhatt’s abrupt resignation

Shares of IT services company Coforge rallied 2% to Rs 1,800 on the BSE on Tuesday after appointing former Bharti Enterprises vice-chairman Akhil Kumar Gupta as its chairperson and non-executive independent director for a five-year term, effective Tuesday. The appointment comes as the company looks to move past a period of boardroom turmoil.

Gupta's appointment follows former chairman and veteran banker O P Bhatt's abrupt resignation on September 9. An internal audit had found that Bhatt withheld a board evaluation report that gave his own performance the lowest rating.

Following Bhatt's exit, Coforge appointed non-executive independent director Vivek Sharma as interim chairperson and brought in global executive search firm Egon Zehnder to find a new chairman.


"We ran a very rigorous and intense global search process in partnership with Egon Zehnder with a focus on finding a candidate with the highest governance experience, professional expertise, and strategic perspectives - criteria that I had shared earlier at our investor meeting," Sharma said.

He said the initial list of 60 candidates was narrowed down during the process, with Gupta eventually emerging as the unanimous choice of all members of the Nomination and Remuneration Committee and the Board.

The episode had erased more than Rs 4,400 crore from Coforge's market value after its shares fell over 5%. Days later, D K Singh, chairperson of the nomination and remuneration committee, also resigned, citing "differences" and "tension" between independent and executive directors.

The leadership changes had raised concerns among investors, although Coforge has maintained that the matter was entirely separate from its financial reporting. At an investor call following the development, the company reiterated its FY27 financial guidance and said the recent board developments had not changed its strategy or priorities.

Coforge continues to target a consolidated EBITDA margin of 20.5%-21%, an EBIT margin of at least 15.5% and free-cash-flow conversion of above 100% of PAT for FY27. It has also retained its $5 billion four-year target. Coforge said it does not expect any further board churn and that the board is currently functioning as a cohesive team. On the possibility of another independent or third-party investigation, Audit Committee Chair Anil Chanana said no further external review is planned.

Welcoming Gupta, Coforge CEO and Executive Director Sudhir Singh said the new chairman was joining at an important time for both the company and the IT services industry. "We are very excited to have Akhil Gupta join us as the chairperson at a very important time for the industry and the firm. Mr Gupta was instrumental in Bharti Enterprises successfully navigating multiple business shifts during his tenure," Singh said.

"As our industry, in turn, navigates the AI-led era and as Coforge pivots towards making the promise of AI real for enterprises, we welcome Mr Gupta as he steps onto the Board. We are excited about the immense opportunities ahead of us and thrilled to have a person of his calibre and governance experience join us as the chairperson of the Board."

Gupta is a chartered accountant with more than 40 years of professional experience. He currently chairs the boards of 360 ONE WAM Ltd and Bharti Life Insurance Ltd. He is also a board member of Zepto, Snapdeal, Eutelsat Communications and Lodha Developers.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his ‘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 Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.