stock market today: Shares of Birlasoft witnessed heavy selling pressure in morning deals after it announced its third quarter results for the current fiscal on Thursday. Birlasoft share price opened with a fall today and took a hit 250.25 per share within minutes of the stock market opening today, which is a new 52-week low for the IT major. Compare Birlasoft share price with its 52-week high 501.60 per share that it made in April 2022, the IT stock is down almost 50 per cent from its 52-week high. However, MK Global believes that the stock can bounce back and go up 325 level in the long term, giving almost 30 percent return to its shareholders over the long term.
Highlighting the reasons for the fall in Birlasoft share price today, Dipesh Kumar Mehta, Senior Research Analyst, MK Global, said, “Birlasoft reported disappointing operating performance for Q3FY23 and one-time provisions likely to worsen the performance.” Revenue fell 0.3% QoQ to USD148.4 million (flat CC), missed expectations due to higher-than-usual furloughs and customers putting some projects on hold. Adjusted EBITM drove higher furloughs, efficiencies QoQ down 180 bps due to investment and strength. Leadership, The exact financial impact of the bankruptcy filing by Invacare currently remains uncertain.”
The MK Global expert further said that Birlasoft has made a provision of Rs 1.5 billion for outstanding receivables and contracts. property and taking legal advice on Case, Invacare Revenue Run Rate is
Giving ‘Buy’ tag to Birlasoft shares, Dipeshkumar Mehta of MK Global said, “We have cut EPS estimates by 13-34% for FY2023-25, taking into account Q3 performance and client-specific issue.” Keeping in. The valuation of the stock is undervalued; however, the performance of the stock depends on clarity on the impact of Invacare, revenue growth acceleration, and margin recovery in the coming quarters. We maintain Buy with TP. 325 on 16x Dec-24E EPS (earlier Rs.380) given reasonable valuations (>6% FCF yield) and expected turnaround in operating performance.
In the Q3FY23 results announced on Thursday, Birlasoft reported loss of 16.36 crore against The IT company registered a profit of 115 crores in the July-September 2022 quarter. Birlasoft faced various challenges in the recently ended quarter as the company went through a major churn in its top management and some of its key clients also faced bankruptcy. Despite these challenges, Birlasoft’s revenue remains stable 1,222 crore, beating the estimates by a whisker.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any Investment Decision.
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