Birlasoft Q2 Results Review – Revenue Impacted By Multiple Headwinds: ICICI Securities

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Birlasoft Ltd. has reported Q2 FY23 revenue of $148.8 million, up 0.1% QoQ in U.S. dollar terms, much lower than our estimate of up 2% QoQ. In constant currency terms, revenue grew 1.1% QoQ in (our estimate: 3%).

Growth was soft due to decline of 7.4% QoQ in U.S. dollar terms in life sciences on furloughs and project completions. Manufacturing (1.2% QoQ U.S. dollar) and energy and utilities (down 1.3% QoQ U.S. dollar) were also muted.

Banking, financial services and insurance grew at a strong rate of 7.4% QoQ in U.S. dollar terms. Also, the two deals that were pushed forward in Q1 FY23, out of that only one started in the middle of Q2 FY23.

Supply-side constraints also impacted growth in Q2 FY23.

Birlasoft’s deal wins in Q2 FY23 were strong with new deal total contract value of $138 million (up 23% QoQ, 33% YoY) post muted deal TCV in Q1 FY23.

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