Birlasoft Limited

Technology — Information Technology Services · NSE

₹315.10+₹5.60 (+1.81%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Birlasoft Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Birlasoft Limited provides software development and global IT consulting services in India, the Americas, Europe, the United Kingdom, and internationally.

IndustryInformation Technology Services

SectorTechnology

Employees10,266

Annual revenue₹5,310 Cr

How does it make money?

Turns over ₹5,310 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 10,266 employees supports ₹51.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹51.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What is the outlook?

13 analysts covering the stock expect revenue to grow about 5.5% and earnings to grow about 7.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+5.5%

Est. earnings growth+7.8%

Analysts13

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +11% while net margin moved +41% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+11%

Margin effect+41%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.38 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

67/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

15.5x

3Y Median

22.6x

40 monthly readings · mean 30.7x · range 14.7x–71.2x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 3y median of 22.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Cheap

22.6x median over 40 months · -31%

vs. sector peers

Fair

16.5x median of 4 peers · -6%

vs. generic bands

Fair

15x–35x

EV/EBITDA

9.5x

PEG

0.97

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 11.9% to 16.9% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 3.42x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Debt is increasingFinancial
Total debt is up 38% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.6% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 11.9% to 16.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 31% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 3.42x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 3.5% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 15%✓ 16.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 3.5% CAGR
Latest reported year was 7.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹437 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹8,812 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.5x

Fair

Fairly valued against the generic band

P/B Ratio

2.14x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹20.33

Profitable

Profitable on a per-share basis

ROE

12.6%

Moderate

Moderate capital efficiency

ROCE

18.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.42x

High

High leverage

Revenue Growth (YoY)

7.4%

Modest

Modest growth

Profit Growth (YoY)

50.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.06%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹437 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

13.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.7%

Average

Average margins

Net Margin

10.6%

Good

Strong bottom-line conversion

Current Ratio

4.29

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

23%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

282.3 / 291.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

72.5

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,795 Cr	₹5,278 Cr	₹5,375 Cr	₹5,310 Cr	+3.5%
EBITDA	₹569 Cr	₹1,086 Cr	₹776 Cr	₹898 Cr	+16.4%
EBITDA Margin	11.9%	20.6%	14.4%	16.9%	—
PAT (Net Profit)	₹332 Cr	₹624 Cr	₹517 Cr	₹518 Cr	+16.1%
EPS	₹11.92	₹22.25	₹18.48	₹18.5	+15.8%
ROE	13.5%	20.5%	14.9%	12.6%	—
ROCE	17.9%	26.9%	19.6%	18.6%	—
Total Debt	₹102 Cr	₹93 Cr	₹151 Cr	₹141 Cr	+11.4%
Free Cash Flow	₹503 Cr	₹692 Cr	₹539 Cr	₹437 Cr	-4.6%

🟢 Revenue has grown at 3.5% a year over 3 years.

🟢 EBITDA has grown at 16.4% a year over 3 years.

🟢 EBITDA Margin has risen from 11.9% to 16.9% over 3 years (+5.0 pts).

🟢 PAT (Net Profit) has grown at 16.1% a year over 3 years.

🟢 EPS has grown at 15.8% a year over 3 years.

🟡 ROE has held roughly flat at 12.6% over 3 years.

🟡 ROCE has held roughly flat at 18.6% over 3 years.

🔴 Total Debt has grown at 11.4% a year over 3 years.

🔴 Free Cash Flow has shrunk at 4.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5,266 Cr

Total Liabilities

₹1,153 Cr

Cash & Equivalents

₹426 Cr

Operating Cash Flow

₹481 Cr

Capex

-₹44 Cr

Shareholding (proxy)

Institutional Holding

26.4%

Insider Holding

40.9%

Corporate Actions

Next Earnings

28 Oct 2026

Dividend Rate

₹6.5

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

6 Buy · 7 Hold · 1 Sell

Target Price (Mean)

₹328.71

+4.3% vs CMP

Target Range

₹252 – ₹419

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

3 mixed3 general

What Investors Got Wrong About Birlasoft Before The Drop

Simply Wall Street, 18 Oct

BSOFT Outlook for the Week

Equitypandit, 09 Oct

BSOFT Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Why Is BIRLASOFT Share Price Falling Key Reasons 2026

Univest, 03 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

LTM, Cyient, Zen, Birlasoft share price target, stop-loss - IT stocks to buy for over 32% returns ahead of Q2 results

Livemint, 04 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Birlasoft promoters confirm no encumbrance on shares in FY26

scanx.trade, 15 Jun

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

MiddlingRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑