Birlasoft Ltd - Q2FY21 Company Update - ICICI Direct

Birlasoft Ltd (Birlasoft) dollar revenues declined 4.6% QoQ mainly due to milestone achievement in large deal won in lifescience segment (which declined 20.5% QoQ), discounts and project deferrals. However, the company continues to execute well on margins front, which improved 158 bps QoQ (up 288 bps YoY) to 13.9% mainly led by rationalisation of SG&A expenses and higher utilisation partially offset by higher onsite revenues. Net profit increased 22.7% QoQ to Rs. 69.1 crore due to higher other income. The company has declared a dividend of Rs. 1/share. Birlasoft's order book is also healthy, up 52.4% QoQ to US$274 million.

Valuation & Outlook

Birlasoft is expected to register healthy growth in revenues led by traction in digital, client mining and large deal wins. In addition, cost rationalisation is expected to drive margins. Further, healthy cash balance could lead to inorganic expansion or healthy dividend payout. Hence, we maintain BUY rating with a revised target price of Rs. 220 (14x FY23E EPS).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Birlasoft_CoUpdate_Nov20.pdf

Shares of Birlasoft Limited was last trading in BSE at Rs.185.65 as compared to the previous close of Rs. 181.85. The total number of shares traded during the day was 110713 in over 2480 trades.

The stock hit an intraday high of Rs. 187.9 and intraday low of 182.6. The net turnover during the day was Rs. 20456740.

Source : Equity Bulls

Keywords