Buy Birlasoft, target price Rs 210: Centrum Broking
Birlasoft Ltd., incorporated in the year 1990, is a Small Cap company (having a market cap of Rs 5001.87 Crore) operating in IT Software sector.
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Promoters held 40.7 per cent stake in the company as of Sept 30, 2020, while FIIs held 22.5 per cent, DIIs 9 per cent and public and others 27.8 per cent.
Centrum Broking has given a buy rating to Birlasoft with a target price of Rs 210. The share price moved down by 2.17 per cent from its previous close of Rs 184. The stock’s last traded price is Rs 180.
Birlasoft Ltd., incorporated in the year 1990, is a Small Cap company (having a market cap of Rs 5001.87 Crore) operating in IT Software sector.
Financials For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 857.46 Crore, down 6.25 % from last quarter Sales of Rs 914.63 Crore and up 10.87 % from last year same quarter Sales of Rs 773.42 Crore Company reported net profit after tax of Rs 69.12 Crore in latest quarter.
Investment Rationale Despite 2Q revenue miss, Birlasoft could still manage to deliver 3% USD revenue growth for FY21.Birlasoft trades at 13.7x FY22E EPS and valuations are reasonable. Street might wait for 3QFY21 results to gain confidence on revenue trajectory and drive re-rating. Net cash on balance sheet is Rs9170mn (18% of Mcap). While company gave Rs1/sh dividend this quarter, exploring a buyback is a good option in medium term. Promoter/FII Holdings Promoters held 40.7 per cent stake in the company as of Sept 30, 2020, while FIIs held 22.5 per cent, DIIs 9 per cent and public and others 27.8 per cent.
