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IDBI Capital Report
Despite a strong Q3 performance, Birlasoft Ltd. reported strong 1.6% QoQ growth in constant currency terms. The company on full year basis has also reported healthy YoY growth (up 7.1% YoY) better than many peers.
Further, despite macro challenges and flat total contract value, the company aspires to drive industry leading growth in FY25E.
We believe this will be led by US$100 million deal ramp up in Q1 FY25E and large deals won in banking, financial services and insurance and life science.
Further, we believe traction in ERP (33% of company's revenues), growth in rest of world and uptick in BFSI is expected to drive Birlasoft's growth (built in 13% CAGR over FY24-FY26E).
We have marginally tweaked our earnings per share downwards by ~1% and target price to Rs 780 (26 times FY26E EPS) from Rs 785.
However, the recent fall in stock prompt us to upgrade the stock from Hold to Buy.
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