This Ashish Dhawan stock hits 5-month high on robust Q4 earnings — here's what analysts suggest

Shares in Birlasoft were in high demand on Dalal Street on Tuesday, a day after the IT services company reported a better-than-estimated set of Q4 results.

The stock surged more than eight per cent to a five-month high of Rs 312 apiece on BSE, having crossed to intraday targets of Rs 298 and Rs 304  set by Zee Business Managing Editor Anil Singhvi earlier in the day.

The market wizard said that the company's results were better than estimates driven by strong revenue growth and a better EBIT margin of around 12 per cent.

Birlasoft Q4 results

Birlasoft turned profitable on a sequential basis, with a net profit of Rs 112 crore for the quarter ended March 2023 as against a net loss of Rs 16.3 crore for the previous three months.

Birlasoft Q4 results: What analysts say

Analysts said revenue growth on account of a healthy mix of sales from emerging tech and enterprise solutions segments along with stable order wins mainly boosted the company's profitability.

“The Tier II IT services company is taking the right step to turnaround the business-like focus on delivery, clients, investment in sales and hiring of leaders to drive vertical growth," said Devang Bhatt, Research Analyst at IDBI Capital.  

Bhatt expects Birlasoft to register sequential growth in coming quarters led by BFSI, bottoming of ERP business and a healthy second half of the current fiscal year. The brokerage raised its multiple for Birlasoft to 15x from 14x.

IDBI Capital maintained a ‘buy’ rating on the stock with a target price of Rs 340 per share.

With the company's restructure plan, a one–time settlement with Invacare now behind, a strong order book and abating attrition bodes well for its overall growth, Religare Broking Analyst Nirvi Ashar said.

The demand and strong orders will be driven by the America region along with its transformation and ERP business, Ashar said.

The brokerage maintained a ‘buy’ call on the stock with a target price of Rs 341 apiece.

Birlasoft dividend 

Along with Q4 earnings, the IT company also announced a 100 per cent final dividend for the previous financial year. The board of directors has approved the “recommendation of a final dividend of Rs. 2/- per equity share of face value of Rs. 2/- each (100%), for the financial year 2022-23.”

The final dividend is subject to a declaration of the same by the members at the ensuing Annual General Meeting of the company.

Birlasoft, an Ashish Dhawan portfolio stock

Ace investor Ashish Dhawan has around 2,764,615 equity shares or 1 per cent stake in Birlasoft Limited as of March 2023 quarter, according to a shareholding pattern of the company on BSE.

The renowned investor Ashish Dhawan, whose portfolio is tracked by many retail stock market investors, publicly holds 14 stocks with a net worth of over Rs 2,845.1 crore as of May 9, 2023, according to the stock analysis website trendlyne.com.

Birlasoft stock historical performance

Birlasoft shares have grown almost 18 per cent in value over the past one month, a period in which the Nifty index has risen four per cent.

The stock has fallen around 20 per cent in the last one year, in stark contrast to a 12 per cent gain in the benchmark index.

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