Birlasoft Q4 Results: Profit Surges Over 11%, Revenue Rises Amid IT Slowdown

Birlasoft Ltd. has seen profit and revenue growth in a quarter when several of its larger peers have declined.

Consolidated revenue of the Pune-based IT services firm rose 1.45% over the previous three months to Rs 1,362.54 crore in the quarter ended March 31, 2024, according to an exchange filing on Monday. That compares with the Rs 1,368.70-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue up 1.45% at Rs 1,362.54 crore (Estimate: Rs 1,368.70 crore).

• EBIT up 3.82% at Rs 200.62 crore (Estimate: Rs 202.3 crore).

• EBIT margin expands 33 basis points to 14.72% (Estimate: 14.78%).

• Net profit up 11.81% at Rs 180.8 crore (Estimate: Rs 163.90 crore).

Note: One basis point is one-hundredth of a percentage point.

Additionally, the CK Birla Group company has declared a final dividend of Rs 4 per share.

In dollar terms, revenue of the company increased 1.6% sequentially to $163.9 million in the fiscal fourth quarter. It was up 1.6% in constant currency terms.

For the full year, the top line grew 10.1% year-on-year to Rs 5,278.1 crore in FY24. In dollar and constant currency terms, it was up 7.1% and 6.7%, respectively, to $637.2 million. The operational profitability—measured as earnings before interest and tax—almost doubled annually to Rs 851.19 crore, while the company enjoyed a profitability margin of 16.12%—up 699 basis points over the year earlier.

The bottom line jumped 88.1% year-on-year to Rs 623.8 crore.

“We are pleased to report a robust operating performance for both the quarter and the full year, delivering revenue growth as well as margin expansion in the face of continued macro uncertainty,” Angan Guha, chief executive officer at Birlasoft, said in a statement. 

“While our near-term outlook is likely to reflect the impact of shifts in customer priorities that affect both transformational and discretionary spends, we continue to invest in our capabilities…”

Birlasoft, then, has emerged as an outlier of sorts, at a time when India’s $250-billion industry is plagued by persistent macroeconomic headwinds.

That outperformance also reflects in its BFSI vertical, which has grown 4.4% sequentially, while others have witnessed a shrinkage in the mainstay business. Other verticals, including enterprise resource planning (7.6%), manufacturing (3.6%) and lifescience services grew as well. Still, the company remained a largely manufacturing-driven enterprise, with the vertical accounting for 41.9% of revenue. It was followed by lifescience services (22.1%), BFSI (21.2%), and energy and utilities (14.8%).

Geographically, Birlasoft continued to draw more than 80% of its revenue from the US.

The Pune-based IT services firm clocked a total contract value of $107 million in Q4 FY24, as against $94 million in the previous quarter. As on March 31, the company had 259 active clients—a sequential net decline of 13. While a majority of clients were in the million-dollar category, the top five continued to bring in a third of the overall revenue.

“We are exiting the year with an Ebitda margin of 16.3% during Q4 FY24. This has been achieved by absorbing the investments we have been making in our business,” Kamini Shah, chief financial officer at Birlasoft, said in the statement. “Our DSO (days sales outstanding) at 55 days continues to be among the best in the industry.”

“We have ended the year with a robust balance sheet, even as we stay sharply focused on disciplined execution and operational efficiency.”

As on March 31, 2024, Birlasoft had a total headcount of 12,595 employees—an increase of 239 sequentially and 402 more than at the end of FY23. Again, the net addition was a rarity in a year of exits for the wider IT services industry.

The utilisation rate stood at 86.3%. The attrition rate was at 12.4%.

On Monday, Birlasoft shares rose 0.22% to Rs 675.80 apiece on the BSE, even as the benchmark Sensex ended the day 1.28% higher at Rs 74,671.28 points. The quarterly results were declared after market hours.