Birlasoft Revenue analysuis

"Birlasoft’s revenue reached $161.3 million, showing a 1.9% increase quarter-on-quarter in constant currency (CC) terms. This surpassed expectations of 0.9% quarter-on-quarter CC growth. The growth was driven by various sectors, including Energy and Utilities, Manufacturing, and Lifesciences, with overall expansion across service lines. Despite the full impact of a wage hike, the EBITDA margin increased by 14 basis points quarter-on-quarter to 16%, surpassing estimates of 15.1%, thanks to operational efficiencies and better utilization.

Birlasoft secured Total Contract Value (TCV) deals worth $213 million, representing a 20% decrease quarter-on-quarter and a 6% decrease year-on-year. Of this, new deal wins TCV amounted to $94 million, marking a 44% decrease quarter-on-quarter and an 8% decrease year-on-year. Revenues from the Top 5, Top 10, and Top 20 clients grew by 4.6%, 3.9%, and 3.2% quarter-on-quarter, respectively.

With a robust deal pipeline and deal ramp-ups, Birlasoft is positioned for industry-leading growth in the medium term. Consequently, a Buy recommendation is maintained on Birlasoft with a revised price target (PT) of Rs. 950. The increase in PT reflects an adjustment in the target multiple to account for consistent outperformance under new leadership. At the current market price (CMP), the stock is trading at 31.6/25.2 times its estimated earnings per share (EPS) for FY25/26."