┬аFrom a Rs 57-odd level in March 2020 to a record high of Rs 585.85 level this January, shares of IT firm Birlasoft rallied a solid 928 per cent in less than two years. Since then, the scrip has lost over half of its market capitalisation.┬а
Seasoned investor Ashish Dhawan has been trimming his stake in the company for some quarters now. Ashish Kacholia and Mukul Agrawal, two other known investors, have already exited the counter in the past few quarters.
A decline in attrition could be a margin tailwind, analysts said on Birlasoft following a mixed set of September quarter results. Revenue growth acceleration remains key for the stock price performance, they said.┬а
For the September quarter, revenue growth was hit by multiple headwinds such as challenging macro-environment, lower annuity revenues and supply-side issues.┬а
The Birlasoft management has re-iterated its aspiration of double digit revenue growth in FY23. But ICICI Securities said it would be difficult, given the elongated decision making cycle by clients and the potential impact of furloughs and lower working days in December quarter.┬а
“We model a 9 per cent YoY revenue growth in FY23E,” the brokerage said while suggesting a target of Rs 284 on the stock.
Emkay Global said Birlasoft continues to grapple with weakness in life sciences and E&U verticals, which declined 7.4 per cent and 1.3 per cent ┬аsequentially in the September quarter.┬а
“The company is witnessing a trend of elongated deal closure and execution cycle, as clients look to reduce their immediate cash outflows; however, it has not witnessed any project cancelations,” it said.
This brokerage has cut its EPS estimates for Birlasoft by 1.9-3.3 per cent for FY23-25, factoring in Q2 performance. Revenue growth acceleration remains key for stock price performance, it said while suggesting a lower target of Rs 370 ┬аfrom Rs 380 earlier.┬а
IT company Birlasoft has posted an 11.6 per cent YoY rise in profit at Rs 115 crore compared with Rs 103 crore in the year-ago quarter. Sales grew 17.8 per cent YoY to Rs 1,192 from Rs 1,011.68 crore. Deal wins too were tepid, analysts said.┬а
Nuvama Institutional Equities said Birlasoft is facing short-term challenges due to macro uncertainty and that it has cut its earnings estimates to incorporate such headwinds.
“Nonetheless, medium-term growth outlook for $1 billion in revenue by FY25 remains intact. We reduce our target from Rs 482 to Rs 472,” it said.
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