Birlasoft, a prominent IT services provider, recently reported its unaudited consolidated financial results for the quarter ending 30th June 2024. Following the announcement, the company's stock took a 4.73% hit, closing at ₹676.25, after revealing a 16.59% drop in profit after tax (PAT) to ₹150.20 crore in Q1 FY25, compared to ₹180.08 crore in Q4 FY24. This performance comes amidst a challenging market, and investors looking to buy shares online should closely monitor these developments.
Despite the drop in PAT, Birlasoft posted a 5.12% rise in revenue from operations, reaching ₹1,327.43 crore in Q1 FY25. However, the company's EBITDA only saw a marginal growth of 1%, standing at ₹195.1 crore compared to ₹193.1 crore in Q1 FY24. The EBITDA margin also saw a contraction, falling by 60 basis points to 14.7% from 15.3%. For those planning to buy shares online, this mixed performance reflects the company's struggle to balance revenue growth with profitability.
In dollar terms, Birlasoft's revenue for Q1 FY25 stood at $159.1 million, representing a 3.6% year-on-year increase. When measured in constant currency, revenue climbed 3.8% year-on-year. The company's performance highlights its resilience in global markets despite economic headwinds. This steady growth in revenue could be a positive signal for investors looking to buy shares online and diversify their portfolios.
Birlasoft signed new deals with a total contract value (TCV) of $160 million during the quarter, including $94 million in new deal wins and $66 million in renewals. The company's active client count stood at 258 in Q1 FY25, compared to 259 in Q4 FY24 and 285 in Q1 FY24. While the client count remains stable, the steady deal flow indicates the company's ability to maintain strong relationships with existing clients and win new business. Investors interested in buying shares online should consider this factor as an indicator of the company's long-term potential.
Birlasoft's cash and cash equivalents grew significantly, increasing to $229.7 million by the end of Q1 FY25, compared to $209.2 million at the close of Q4 FY24. The company's solid cash position and strong quarterly collections reinforce its financial stability. With cash reserves increasing by 46% year-on-year, Birlasoft remains well-positioned to continue investing in future growth initiatives. For those considering buying shares online, the company's financial health is a promising sign.
Birlasoft's workforce strength rose to 12,865 employees as of 30th June 2024, with attrition improving to 11.6% in Q1 FY25. This reflects the company's efforts to retain talent and build a stable workforce, which is essential for driving future growth. A healthy workforce combined with a declining attrition rate suggests that the company is in a good position to continue delivering quality services to its clients. Investors who buy shares online might see this as a factor that supports the company's ability to meet future demand.
According to CEO Angan Guha, the company faced a challenging operating environment during the quarter, with customers cutting back on discretionary spending. However, he highlighted the strong performance of Birlasoft's Infra and ROW businesses, which have historically contributed less to overall revenue.
CFO Kamini Shah also pointed to the company's 5.1% year-on-year revenue growth to ₹13,274 million and a 9.2% rise in PAT to ₹1,502 million. With improvements in the days' sales outstanding (DSO) to 52 days and strong cash flow, the company remains confident in its ability to navigate the current macroeconomic challenges. Investors seeking to buy shares online should take note of this optimistic outlook despite short-term setbacks.
While Birlasoft's Q1 results show a decline in profit, the company remains on a solid footing with steady revenue growth and a robust cash position. The management's focus on strengthening its capabilities and expanding its footprint, combined with a solid pipeline of new deals, positions the company for future growth. For those looking to buy shares online, Birlasoft's ability to navigate challenges and maintain financial stability could offer long-term investment potential, even as it faces immediate headwinds.
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