Sharekhan has given Buy recommendation for Birlasoft with a target price of Rs. 500 in its research report issued on Jul 28, 2021
Sharekhan’s research report on Birlasoft
Strong revenue growth despite COVID-19 second wave; new deal TCVs remained weak, but are expected to improve going ahead led by strong deal pipeline and easing of travel restrictions. Management optimistic of a 15% y-o-y revenue growth in FY2022E, led by healthy deal pipeline, decent deal wins and strong growth in top accounts; EBITDA margin to sustain in Q2 despite wage revisions. We expect revenue and earnings to clock a 15% and 29% CAGR respectively over FY2021-FY2023E. We prefer stock given its healthy net cash balance and improving return ratios.
We maintain a Buy on Birlasoft with a revised PT of Rs. 500, given its strong earnings growth potential, robust deal pipeline and strong demand environment.