Shares of Birlasoft Ltd. climbed as much as 10% on Thursday, October 29, even after the company reported a mixed set of earnings in the second quarter.
This is its biggest single-day gain since May 24, 2021, when the stock had rising 11.55%
The company’s revenue beat expectations on a sequential basis, while its margins were in-line with estimates.
Its constant currency revenue grew 2.1% sequentially but were down 1.1% from the previous year.
It reported CC revenue growth of 2.1%, which is its best in the last eight quarters.
The company EBITDA margin was at 15.2% from 90 basis points from the previous quarter.
Its wage increments impacted margins by approximately 170 basis points sequentially.
The company’s deal total contract value (TCV) signed at $116 million, declined 31% from the prior quarter but was up 8% from last year. Its net new deals were at $47 million, down 17.5% from the first quarter and up 17.5% from the year-ago period.
Some deals were pushed out to the third and fourth quarters and the management clarified that these deals were not lost.
On AI, the Birlasoft management said there was a 10% increase in machine-generated code during the quarter, helping margins.
The management, in its post-earnings conference call, said it is confident the second half of the fiscal year 2027’s financial performance will be better than the first half. It said demand was steady “if not getting worse but it’s not getting better either”.
The management said the company is steadily moving towards an EBITDA margin of around 15%.
The company’s objective is to maintain margins in the 15%-odd range while continuing to invest in future growth.
Shares of Birlasoft gained 11.5% to hit an intraday high of 341.45 apiece on Thursday. The stock was trading 8% higher at ₹330.55 apiece at 9.51 am. It has gained 23.6% in the past month, but has declined 10% in the last six months and is down 23.07% this year, so far.
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Birlasoft shares surge to biggest single-day gain in over five years after Q2 revenue beat