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BIRLASOFT LIMITEDBIRLASOFT LIMITEDBIRLASOFT LIMITED

BIRLASOFT LIMITED

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Birlasoft Ltd (Pick of the week)******Advice Price= 407 Target Price=560 Stop Loss =310 Holding Period=11 Incorporated in 1995, Birlasoft is a multi-shore business application IT services provider with a presence in the United States, Europe, Asia-Pacific and India. Effective Jan. 1, 2019, Birlasoft (India) Limited and the ‘IT services’ business of KPIT Technologies Limited merged to form a Enterprise Digital and IT Services company named Birlasoft Limited. This C K Birla Group (US$ 2.4 billion) company operates development centres in the United States, China, Poland and India. Birlasoft counts Fortune 100 enterprises across manufacturing, banking & financial services, insurance, media and healthcare industries as clients. The company features in the Top 100 global IT companies recognized by the International Association of Outsourcing Professionals (IAOP). This mid cap company is doing very well recently Region-wise US accounts for almost 80% of Revenues followed by Europe at 10% and remaining by the rest of the world. Its Revenues are well diversified across the clients. Top 5 clients contribute about 27% of Revenues. Sector wise Automotive contributes about 13% Revenue, Life Sciences 13%, Energy/Utilities 18%, BFSI 19%, Discrete Manufacturing Hitech & Media 18% and rest Others. The company has reported very good results for the year ended 2020-21. The confidence in future is evident from the jump in Dividend declared. Also the Dividend payout ratio of 30% is assuring one. Despite marginal increase in Revenues the company has succeeded in expanding the profit margins for the last couple of quarters. With the growing order book the company should continue to do well. Last year its bottom-line grew by 43% and this year we are projecting about 30% growth. Thus for the running year we are targeting a consolidated EPS of Rs 15. With a reasonable PEG of 1.25 we are targeting a share price of about Rs 560. “Despite heightened uncertainties during this pandemic year, we have exited FY21 with .... record deal wins of $ 888 M, 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.
NSE:BSOFT
by kamaldeka