Sharekhan's research report on Birlasoft
Birlasoft is confident of clocking double-digit revenue growth in FY2022, led by strong deal win TCVs, increasing deal sizes, robust deal pipeline, strong top accounts mining and broad-based growth. Management expects EBITDA margin would sustain at 15% with an upward bias in FY2022 despite wage revisions and investments, which would be partly offset by strong revenue growth, higher offshoring and other efficiencies. We expect the company’s revenue/earnings to report a 15%/27% CAGR over FY2021-FY2023E. We prefer stock despite sharp run-up in last one year given strong FCF growth, healthy net cash balance and improving dividend payout ratio.
Outlook
We maintain a Buy rating on Birlasoft with a revised PT of Rs. 450, given strong earnings growth potential, improving deal win rates and strong deal bookings.
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