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Buy Birlasoft; target of Rs 410: Sharekhan

Sharekhan is bullish on Birlasoft has recommended buy rating on the stock with a target price of Rs 410 in its research report dated August 03, 2022.

August 05, 2022 / 10:23 PM IST
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Sharekhan's research report on Birlasoft


Birlasoft Limited (Birlasoft) reported below-than-expected revenue growth as a couple of client engagements were deferred. EBITDA margin declined due to higher costs to backfill attrition and lower utilization. Net new deal TCVs for Q1FY2023 were up 19% y-o-y, while the deal pipeline stood at $1.7 billion (up 40% q-o-q) in Q1FY2023. Management remains confident in achieving $100 million in revenues from its Microsoft relationship in next couple of years. With the ramp-up of the delayed engagements, healthy deal intake and broad-based growth across top accounts, we expect growth to accelerate in the remaining quarters of FY2023. EBITDA margin to remain stable with an upward bias in Q2FY23E despite wage revisions.



Outlook


We maintain Buy with a revised PT of Rs. 410, given a healthy deal intake, strong deal pipeline and robust partnership with Hyperscalers (including Google and Microsoft).

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Birlasoft - 040822 - khan

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first published: Aug 5, 2022 10:23 pm
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