Birlasoft Ltd. share price target

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.

What should investors do? Birlasoft's share price has grown by ~3.9x since it demerger (from ~| 114 in February 2019 to ~| 445 levels in January 2022). We continue to remain positive and retain our BUY rating on the stock....

ecosystem. The company's consultative and design thinking approach makes societies more productive by helping customers run businesses. Birlasoft offers IT services worldwide from development centers in India and Australia. BSOFT and KPIT's IT services business has merged to form a leading publicly listed Enterprise...

Background: KPIT Technologies is leading is a global technology company providing software solutions that help mobility companies leapfrog towards autonomous, clean, smart and connected future. The major focus areas of the company are power train (Conventional and electrical), autonomous technology (vision and control systems), connectivity and diagnostics. The company's focus sub verticals are Passenger cars, Commercial and Off-highway vehicles and New Mobility. KPIT derives 84.6% of its revenue from strategic top 21 clients. The company has 6,732 employees to cater services to 55 clients. The company's business is spread across America (41%), Europe (39%), and Row (20%)....

What should investors do? Birlasoft's share price has grown by ~3.5x since it demerger (from ~| 114 in February 2019 to ~| 406 levels in October 2021). Target Price and Valuation: We value Birlasoft at | 475 i.e. 23x P/E on FY23E EPS....