The shares of the IT services provider fell up to 6 percent in today’s trading session after a well-known brokerage firm trimmed its target price by 45 percent and downgraded it on margin concerns.
With a market capitalization of Rs 11,142.88 crore, the shares of Birlasoft Ltd were trading at Rs 401.00 per share, decreasing around 4.60 percent as compared to the previous closing price of Rs 420.55 apiece.
Brokerage Recommendations
Global brokerage Macquarie downgraded a prominent IT stock from “outperform” to “underperform” and slashed its target price by 45 percent, from Rs 640 to Rs 350 per share. This revision signals a potential 14 percent downside from the stock’s Friday price of Rs 401. The downgrade reflects a more cautious outlook on the stock’s future performance.
Macquarie noted that Birlasoft’s revenue continued to decline in Q4, with weakness seen across verticals and clients. The brokerage has lowered its revenue estimates and expects margins to remain under pressure through FY26, reflecting ongoing challenges in the company’s performance and outlook.
Macquarie no longer expects margin expansion at Birlasoft from offshore shifts, projecting growth and margin recovery only by FY27. It cut the valuation multiple to 15x FY27 P/E from 27x and slashed EPS estimates for FY26 and FY27 by 30 percent and 28 percent, respectively, due to lowered revenue expectations.
Financial & operational Highlights
The company’s financial performance declined marginally, with revenue falling 3 percent from Rs 1,363 crore in Q4FY24 to Rs 1,317 crore in Q4FY25. Net profit dipped by 32 percent, from Rs 180 crore to Rs 122 crore during the same period, reflecting weak operational and financial growth.
The company’s Q4 FY25 metrics show stable revenue by geography, with the Americas contributing 86.9 percent. Manufacturing leads industry verticals at 39.5 percent, while Digital and Data dominate service offerings at 56.6 percent. Overall, revenue trends remain consistent across quarters, reflecting balanced growth across sectors and services.
Birlasoft Limited is engaged in providing information and communication, computer programming, consultancy, and related activities. The Company provides a range of services, which include digital and enterprise technologies and services.
Written by Abhishek Singh
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