Birlasoft: Quarterly Result update
04-02-2022

Birlasoft Ltd. | Market Cap: Rs. 13,223 Cr.

CMP 474 | PE 24x FY23

 

Results: Birlasoft reported ~6% sequential growth in sales and operating profit grew ~7% in the same period.

Sales for the quarter was Rs. 1,071 Cr versus 880 Cr in Q3FY21. This indicates a 21.7% growth year on year. The operating margin declined to 15.2% (vs 16.4% in Q3FY21).

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Key highlights: 

  • Birlasoft signed deals of the value of $ 319 Mn during the quarter. The company had US$1.2bn sales pipeline despite of reduced size of the deals (vs ~US$750mn in FY21)
  • The company has maintained its guidance of US$1 billion in revenues by FY25
  • Total employee headcount decreased to 11,945 (vs 12,065 in Q2FY22). The attrition rate was at all time high at 31% (vs 24% in Q2FY22). The utilization rate reduced to 85% from 86% in previous quarter. Overall a negative development

Outlook:  The management expects attrition to cool off in next few months. The company is witnessing a marginal increase in client budget spending which is a positive indication as far as demand is considered. The management sees good momentum, good pipeline coming from client in all aspects and is watchful on talent supply. Growth for now doesn’t seem to be an issue as it is expected to continue as company is working in hi-tech, digital space, where there are significant opportunities in platform business. The key reason for decline in headcount is due to optimization of bench, higher fixed price projects and reallocation of resources.

 

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