The IT services company reported a 43.3 percent rise in consolidated net profit at Rs 98.9 crore for the March 2021 quarter. It had posted a profit of Rs 69 crore in the year-ago period.
Birlasoft share price surged over 11 percent intraday on May 24 hitting new 52-week high of Rs 312.
The IT services company, part of the USD 2 billion diversified C K Birla Group, on May 21 reported a 43.3 percent rise in consolidated net profit at Rs 98.9 crore for the March 2021 quarter. It had posted a profit of Rs 69 crore in the year-ago period, Birlasoft said in a regulatory filing.
This was largely due to sharp cost controls initiated by the company. Net profit margins for the March 2021 quarter stood at 10.96 percent, sharply higher than 7.61 percent in March 2020 quarter.
Revenue from operations, however, declined marginally to Rs 902.8 crore in the quarter under review from Rs 907 crore in the January-March 2020 period, it added.
The stock was trading at Rs 299.10, up Rs 31.55, or 11.79 percent at 12:04 hours. It has touched an intraday high of Rs 312.00 and an intraday low of Rs 272.25.
The company signed deals worth USD 326 million in total contract value (TCV) during the quarter.
In dollar terms, the company’s net profit grew 41.4 per cent to USD 13.5 million, while revenue was lower by 1.8 per cent to USD 123.3 million in March 2021 quarter from the year-ago period.
Research and broking firm Anand Rathi in its report said that the company expects double-digit growth in FY22 and is looking to keep its EBITDA margins at 15 percent+. The payout in the next few years is likely to rise gradually. Looking for M&A opportunities with revenue size of $150-200 million (33 percent of FY22 AR revenue estimate).
“We raise our target multiple to 20x FY23e EPS (from 18x), reflecting steady execution and strong deal wins in Q4. After a strong Q4, we raise our FY22e/FY23e EBITDA 6 percent/3 percent, and our target to Rs 350 (from Rs310 earlier),” it said.
“There is also an expectation of pent-up demand for its services in the manufacturing and healthcare verticals. The stock trades at 15x FY23e, which we find attractive,” it added.
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