Share of BirlaSoft rose 17 per cent to hit a fresh 52-week high of Rs 312 after the company reported a 43.3 percent rise in consolidated net profit for the March 2021 quarter.
The company reported a net profit of Rs 98.9 crore in last quarter against profit in the year-ago period stood at Rs 19 crore. Revenue from operations declined marginally to Rs 902.8 crore for the quarter ended March 2021 compared to Rs 907 crore in the year-ago period.
The small-cap share has delivered more than 300 per cent returns to its shareholders in the last 12 months. The share stood at Rs 72.9 on May 26, 2020. It has zoomed to Rs 312 today, translating into gains of 327 per cent during the period. In comparison, Sensex clocked 65 per cent in one year.
The stock ended 13.44 per cent higher at Rs 297.85 against the previous close of Rs 267.55 on BSE. It has gained 21 per cent since the beginning of this year. Birlasoft's share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages. Market cap of the firm rose to Rs 8,267.82 crore.
The company informed that the revenue for Top 5, Top 10 & Top 20 clients grew by 21.1%, 19.8%, and 19.2% respectively in FY21.
ICICI Direct maintains a 'BUY' rating with a target price of Rs 315 per share. The brokerage house expects the company to continue to improve annuity revenues, cross-sell to clients and focus on niche verticals. It also expects margins to improve ~90 bps to 15.8% in FY21-23E. Also, we expect PAT to improve due to migration to the new tax regime.
"Birlasoft's focus on client mining, expansion in Europe & APAC, improving growth in top 30 accounts, healthy deal pipeline, healthy order book, increase in deal sizes, project ramp ups, reversal of discounts, focused ERP channel sales and anticipated higher net new growth bode well for revenue growth in coming years. Hence, we expect dollar revenues to increase at a CAGR of 13.6% over FY21-23E," added ICICI Direct.
Emkay Research has a 'BUY' call too with a target price of Rs 330 per share. "With a strong deal intake and a healthy deal pipeline, Birlasoft expects acceleration in revenue growth, and is confident of delivering double-digit revenue growth in FY22," noted the brokerage firm.
Speaking on the earnings, Dharmender Kapoor, Managing Director and CEO of Birlasoft said, "Despite heightened uncertainties during this pandemic year, we have exited FY21 with several key milestones, namely, revenue growth of 8% in rupee terms, profit growth of 43%, EBITDA margins of ~15%, record deal wins of $ 888 million, healthy cash generation and top-customer led growth. The all-round improvement on all operating metrics is very reassuring and sets the foundation for continued momentum into FY22."
"With due focus on a robust customer-centric strategy to win more transformational, multi-services and long-term deals, combined with operational rigor, we are confident of accelerated growth in FY22 and beyond," he added.
Recently, the company also partnered with Riversand, a cloud-native Master Data Management (MDM) and Product Information Management (PIM) solution provider.
Riversand provides a Master Data Experience Platform (MDxP), enabling customers to leverage their data through intelligent insights, automation, and multi-domain SaaS solutions.
The IT services company plans to achieve a target of $1 billion in revenues in the next four years. It aims to achieve this via organic (which we believe would be 14% CAGR) and inorganic revenues of $150-200 million.
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