Birlasoft shares slip over 2% after Q4 results; is it a buying opportunity?

Birlasoft shares lost over 2 per cent in Tuesday's (April 30) trade. The scrip touched the day's low at Rs 656 apiece on BSE. The selling pressure in the stock came after the private sector lender reported Q4 results.

At around 10:01 a.m., shares of Birlasoft traded 1.16 per cent, or Rs 7.85, lower at Rs 666.75 apiece. The market capitalisation of the company at around the same time stood at Rs 18,377.26 crore. 

Birlasoft Q4 results 

IT company Birlasoft on Monday reported a 60.55 per cent increase in consolidated net profit to Rs 180.08 crore during the March quarter.

The company had recorded a net profit of Rs 112.16 crore in the year-ago period.

The Pune-based company's revenue from operations stood at Rs 1,362.5 crore in the fourth quarter of FY24, up 11.10 per cent from Rs 1,226.3 crore a year earlier.

Birlasoft dividend 

The company's board approved a final dividend of Rs 4 per equity share of face value of Rs 2 each (200 per cent) for FY24.

Management commentary

"While our near-term outlook is likely to reflect the impact of shifts in customer priorities that affect both transformational and discretionary spending, we continue to invest in our capabilities such as Generative AI where we have been early adopters," said Birlasoft CEO and MD Angan Guha.

Should you buy?

Nomura maintained 'buy' and cut the target price to Rs 860 from Rs 950. As per the brokerage, the Q4 revenue and margins were below estimates and discretionary slowdown and weak order book could limit near-term growth. 

InCred Equities retained a 'hold' rating on the stock and gave the target price of Rs 675 apiece. 

"Although strong cash generation, net cash of Rs60/share, and a healthy payout ratio provide cushion to the share price, the entry valuation is not still attractive and is not factoring in any margin of safety for potential client-specific challenges," the report read.

"On the weekly chart, the stock has seen a short-term reversal pattern; on the technical front, a short-term bearish engulfing chart pattern has been formed, which is bearish in nature, so traders can book profit in this stock at the current market price. Short-term weekly support stands at 570–580 and resistance stands at 750," said Ganesh Dongre, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers.

Birlasoft share price: Past performance

In a year, Birlasoft shares have gained over 139 per cent against Nifty50's rise of over 25 per cent. 

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