Birlasoft soars 9% on heavy volumes post better-than-expected Q4 results

Shares of Birlasoft soared 9 per cent to Rs 313.40 on the BSE in Tuesday’s intra-day trade amid heavy volumes after the company reported a better-than-expected operating performance in Q4.

Its revenue grew 0.5 per cent QoQ to $149.1 million while ex-Invacare, the growth was 3.1 per cent QoQ in constant currency (CC) aided by strong total contract value (TCV) in the previous quarters.

At 01:36 pm; the stock was trading 8 per cent higher at Rs 310.70, as compared to 0.10 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped nearly 10-fold with a combined 16.9 million shares, representing 6 per cent of total equity of Birlasoft, having changed hands on the NSE and BSE.

EBITDA (earnings before interest, taxes, depreciation, and amortization) margin expanded by 20 bps QoQ to 13.6 per cent – an impressive feat, considering that the quarter saw Invacare-related costs as well, analysts at Emkay Global Financial Services said in a result update.

Deal signings during the quarter at $286 million TCV have been the best during the year under review, Birlasoft said. Management remained cautiously optimistic on FY24 growth, and focussed on execution with the view to sustain sequential revenue growth.

Weak discretionary spending, slower decision-making, shift in clients’ priorities towards cost optimization, impact of the Invacare exit, and challenging macros will weigh on FY24 growth. Given the macro uncertainties and the risks of run-offs, Management refrained from providing FY24 growth outlook, Emlkay Global said.

According to ICICI Securities, the invacare impact is behind now as both parties agreed to a mutual termination of the contract and the company can focus on growth. The company’s growth in FY23 was much lower than the original guidance of 15 per cent given by the previous management due to invacare issues ($18 mn loss) and execution issues due to high attrition throughout the year.

New CEO ( came from Wipro) now re-aligned the structure to focus on growth especially from US market (85 per cent of revenue ) by appointing four vertical heads responsible for growth in verticals like manufacturing, BFSI, Energy and Lifesciences.

The company is cautious on macro concerns and delayed decision making at the client side and, hence, expects growth to pick up from H2FY24 onwards. The company is now targeting exit margins of 16 per cent in FY24 to be aided by attrition moderation, utilisation improvement, while it is already factoring wage hike in Q2FY24, ICICI Securities said in a note.