Analysts Have Been Trimming Their Birlasoft Limited (NSE:BSOFT) Price Target After Its Latest Report

Birlasoft Limited (NSE:BSOFT) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of ₹53b were in line with what the analysts predicted, Birlasoft surprised by delivering a statutory profit of ₹22.25 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Birlasoft

Taking into account the latest results, the most recent consensus for Birlasoft from twelve analysts is for revenues of ₹58.2b in 2025. If met, it would imply a decent 10% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 9.5% to ₹24.75. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹59.8b and earnings per share (EPS) of ₹25.72 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.2% to ₹778. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Birlasoft at ₹870 per share, while the most bearish prices it at ₹610. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Birlasoft's past performance and to peers in the same industry. We would highlight that Birlasoft's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. Factoring in the forecast slowdown in growth, it seems obvious that Birlasoft is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Birlasoft going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Birlasoft that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.