Buy Birlasoft; target of Rs 410: Sharekhan

Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

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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