Ashish Dhawan portfolio stock: Ace investor Ashish Dhawan-backed small-cap Birlasoft Limited shares have potential to grow up to 33 per cent in long-term as the IT company’s growth persists at the industry level and margins are recovering slowly, domestic brokerage Anand Rathi Share & Stock Broking said in its report.
Birlasoft reported in-line revenue growth in dollar terms, up 1.5 per cent quarter-on-quarter (QoQ) and 16 per cent year-on-year (YoY) to US $148.6 million in the first quarter of the financial year 2022-23 though it faced delays in ramp-ups of two deals, the brokerage said in its report.
The company’s new TCV (total contract value) stood at $112m, TTM (Trailing 12-month) up 7 per cent YoY, held up well despite the company’s greater exposure to discretionary sectors/service lines, the brokerage said, adding that the headcount addition inched up sequentially and attrition cooled.
Anand Rathi values the company at 19x FY24e EPS, around a 40 per cent discount to LTI, reflecting greater dependence on macro sectors such as Manufacturing, Energy, and Utilities and expects Birlasoft to deliver 13/18/16 per cent revenue/EBITDA/PAT CAGRs, respectively, over FY22-24.
The brokerage maintained a Buy rating with a target price of Rs 445 per share, implying a nearly 33 per cent upside from Tuesday’s closing price of Rs 335.6 per share.
Renowned investor Ashish Dhawan holds 36,00,000 equity shares or 1.29 per cent stakes in Birlasoft, according to the June shareholding pattern of the company on the BSE. The celebrity investor publicly holds 14 stocks with a net worth of over Rs 1,973.9 crore as of August 17, as per trendlyne.com.
On Wednesday, shares of Birlasoft gained over 2 per cent to Rs 342.7 per share on the BSE and NSE each intraday. At around 02:40 PM, the stock was trading over 1 per cent higher to Rs 339.35 per share on the BSE and NSE as compared to a 0.61 per cent rise in the BSE Sensex and Nifty50 each.