NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
IDBI Capital Report
Birlasoft Ltd. reported a topline of $ 163.3 million, in-line with our estimates. Deferred deals (Q1) ramping up, vendor consolidated deal wins, broad-based growth across verticals led 2.2% constant currency QoQ revenue growth.
Among the verticals, growth was driven by manufacturing/energy and utility/BFSI (up 4.7%/4.7%/1.4% QoQ) and America grew by 6.7% QoQ among geos. Despite the revenue growth, margins contracted by 260 bps to 12.1% (Ebitda margin) on the back of higher onshore (up 19% QoQ), vendor consolidation deals which are margin dilutive and lower pass through revenue in nature.
Management stated that Q3 will be soft due to seasonality (furloughs) and margins will get further impacted by ~150 bps due to wage hike.
Birlasoft is confident about the revenue growth path from Q4 onwards on the back of new deals pipeline/ consolidation deals and improvement in demand environment (post US elections).
Owing to long term growth, we assume the coverage of the stock with a Buy with a target price of Rs 690 (~25 times earnings per share FY26E).
Click on the attachment to read the full report:
Cyient DLM Q2 Results – Motilal Oswal Retains ‘Buy’ Rating On The Stock; Here’s Why
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
. Read more on Research Reports by NDTV Profit.