Top Mutual Funds
- 01 Aug 2024
- ICICI Securities
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WEAK PERFORMANCE; REVENUE AND MARGINS IMPACTED
BSOFT - 422 Change: 1.40 (0.33 %)News: Birlasoft for Q1FY25 reported revenue of US$ 159.1 mn, down 2.9% QoQ/ up 3.6% YoY (down 2.7% QoQ/ up 3.8% YoY in CC terms) while in rupee terms the company reported revenue of ₹1,327.43 crore, down 2.6% QoQ/ up 5.1% YoY. Vertical wise on a QoQ basis the growth was led by BFSI (23.6% of mix) and Energy & Utilities (15.8% of mix) which grew by 8.1% and 3.6% while Manufacturing (39.2% of mix) and Lifesciences (21.4% of mix) declined by 9.2% and 6% respectively. Geography wise ROW (16% of mix) grew by 15% QoQ while Americas region (84% of mix) declined by 5.7% QoQ. The company reported EBITDA margin of 14.7%, down ~160 bps QoQ primarily due to delay in certain projects in the ERP segment of the Manufacturing vertical. The company’s revenue from Top 5/10 clients de-grew by 0.7%/2% respectively. The company reported TCV of US$ 160 mn including new TCV wins of US$ 94 mn during the quarter. LTM attrition declined by 80 bps QoQ to 11.6% while utilization declined by ~460 bps QoQ to 81.7%.
Views: The company’s performance was impacted due to delay in certain deals in the ERP segment of the Manufacturing vertical and some in the Lifesciences vertical. However, the management mentioned that some projects are back on the table in Q2. Lifesciences is expected to return to growth in H2. Overall, management expects Q2 to be stronger than Q1 on the back of a strong deal pipeline. The company further reiterated that it will continue to invest to strengthen its delivery capabilities which will keep its margin in narrow band of ~16% range in the near term but will help in sustained revenue growth momentum in the medium term.
Impact: Neutral