Anand Rathi has given Buy recommendation for Birlasoft with a target price of Rs. 500 in its research report issued on Jul 29, 2021
Anand Rathi’s research report on Birlasoft
Birlasoft had a steady quarter both in growth and margins. TCV was flattish sequentially (on an LTM basis) but management commentary was positive regarding client engagements and on resumption of discretionary expenditure. Healthcare, weak so far, on large deal achieving steady state, is likely to accelerate. Manufacturing (up 9% q/q), the largest vertical, grew fast, pulling up company growth. The company lost ~1% on supply disruptions, likely to be recouped in Q2. Margins are likely to inch up further in H2 from Q1, despite wage hikes in Q2.
Net, we raise FY22e/23e margins 12%/15% to derive a Rs500 (25x FY23 PE) target.