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Buy Birlasoft; target of Rs 429: Arihant Capital

Arihant Capital is bullish on Birlasoft has recommended buy rating on the stock with a target price of Rs 429 in its research report dated August 04, 2022.

August 06, 2022 / 08:13 AM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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Arihant Capital's research report on Birlasoft


Birlasoft(BSFOT) Ltd in Q1FY23, revenue above our estimates: Reported revenue of $ 148.6 Mn ( up 1.5% QoQ/15.7%YoY in USD terms) against our estimate of $147.8 Mn. In Constant Currency (CC) terms revenue was up 17.7%YoY/2.3%QoQ. Reported revenue of INR 11,544 Mn up 4.8% QoQ/ 22.1% YoY against our estimate of INR 11,410 Mn. The growth has been led by top customers which continue to grow at a healthy pace. The company expertise in driving digital transformation for clients is driving good growth for Business and Technology Transformation services, which recorded a growth of 20.7% YoY.



Outlook


We value Birlasoft at a PE of 20x to its FY24E EPS of INR 21.4, which yields a revised target price of INR 429 per share (earlier target price; INR 443 per share). Accordingly, we maintain a BUY rating on the stock.

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Birlasoft - 040822 - arih

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first published: Aug 6, 2022 08:13 am
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