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BSOFT: Higher Discount Rate Will Pressure Margins And Limit Upside Potential

Client Shifts And Automation Will Crush Traditional Offshore Models

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BSOFT
AnalystLowTarget
Not Invested
Published 10 Jul 2025

Update shared on 12 Dec 2025

Fair value Decreased 9.14%
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AnalystLowTarget's Fair Value
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1Y
-28.8%
7D
-0.7%

Analysts have reduced their fair value estimate for Birlasoft to ₹318 from ₹350. This change reflects a slightly higher discount rate, modestly stronger revenue growth expectations, and a marginally lower projected profit margin and future P/E multiple.

What's in the News

  • Management has issued earnings guidance for the third and fourth quarter of 2025, targeting sequential revenue growth in both periods (company guidance).
  • A Special and Extraordinary Shareholders Meeting is scheduled via postal ballot in India on November 27, 2025, to consider the reappointment of Angan Guha as Chief Executive Officer and Managing Director (shareholder meeting notice).
  • A Board Meeting on November 6, 2025, will review unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, and consider declaration of an interim dividend for FY 2025–26 (board meeting agenda).

Valuation Changes

  • Fair Value Estimate reduced from ₹350.0 to ₹318.0, indicating a modest downgrade in the intrinsic value assessment.
  • Discount Rate increased slightly from 15.07 percent to 15.25 percent, reflecting a marginally higher perceived risk or cost of capital.
  • Revenue Growth raised from 4.04 percent to 4.96 percent, signaling a modestly more optimistic outlook on top line expansion.
  • Net Profit Margin trimmed slightly from 11.23 percent to 10.94 percent, suggesting a small anticipated pressure on profitability.
  • Future P/E lowered from 21.80x to 20.42x, implying a mildly more conservative multiple for valuing future earnings.

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Disclaimer

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