Birlasoft - Getting Better: HDFC Securities

HDFC Securities Institutional Equities

Birlasoft Ltd.’s growth momentum has the potential to accelerate, accompanied by sustainable margin expansion ahead. We believe that Birlasoft possesses a scalable services portfolio and resilience in the current macroeconomic scenario (Birlasoft – the next large mid-tier).

Recent senior-level hires from tier-I companies across service lines and sales are expected to support the addition of marquee logos, facilitate market-share gains in the banking, financial services and insurance vertical, and ensure the continuity of large account mining (T10 growing ahead of the company average).

Our enterprise tracker indicates a recovery in the healthcare vertical, which will further support margin expansion. We have increased our estimates and fair value to factor in a higher certainty of delivery and expect an earnings per share compound annual growth rate of 21% over FY24-26E.

Maintain 'Buy' on Birlasoft with an increased target price of Rs 800, based on 26 times FY26E, supported by an acceleration in organic growth and improving return metrics.

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