Hold Birlasoft, target price Rs 284: ICICI Securities

ICICI Securities has hold call on Birlasoft Ltd. with a target price of Rs 284. The current market price of Birlasoft Ltd. is Rs 272.9. Birlasoft Ltd., incorporated in the year 1990, is a Small Cap company (having a market cap of Rs 7443.46 Crore) operating in IT Software sector.

Birlasoft Ltd. key Products/Revenue Segments include Software Development Charges for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 1189.36 Crore, up 1.66 % from last quarter Total Income of Rs 1169.89 Crore and up 16.48 % from last year same quarter Total Income of Rs 1021.04 Crore. Company reported net profit after tax of Rs 115.05 Crore in latest quarter.

Investment Rationale
The EPS estimate changes by +0.4% / -1.6% for FY23/24E due to a cut in US$ revenue estimate by 1.1% / 2.5% for FY23/24E partially offset by an increase in FX rate assumptions and increase in EBIT margin for FY23 by 40bps. It estimates EPS of Rs17.9 / 20.3 for FY23/24E. Birlasoft is currently trading at 15x / 13x on FY23E / FY24E EPS of Rs17.9 / Rs20.3, respectively. It values the stock at 14x FY24E EPS to arrive at a revised target price of Rs284.

Promoter/FII Holdings
Promoters held 40.32 per cent stake in the company as of 30-Jun-2022, while FIIs owned 15.24 per cent, DIIs 21.12 per cent.