Name: Latest research reports of Birlasoft Ltd. authored by ICICI Securities Limited and published by - Trendlyne research reports.
Item: Birlasoft Ltd.
Rating: 3
Author: ICICI Securities Limited

Deal momentum delayed

Hold: Birlasoft Ltd.

Recommendation Target

ICICI Securities Limited

Birlasoft reported in line EBIT margin of 13%. Sequential drop of 100bps QoQ in margin was due to high cost of hiring, mid and junior level employee promotions and lower utilisation (82.5%, -270bps QoQ). Utilisation dropped due to delayed ramp up of the two deals. In Q2FY23, management expects headwinds from wage hikes to result in 2.5-3% QoQ higher employee expense as a % of revenue.