Birlasoft Limited (NSE:BSOFT) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

Investors in Birlasoft Limited (NSE:BSOFT) had a good week, as its shares rose 3.0% to close at ₹418 following the release of its third-quarter results. The result was positive overall - although revenues of ₹13b were in line with what the analysts predicted, Birlasoft surprised by delivering a statutory profit of ₹4.26 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the 15 analysts covering Birlasoft are now predicting revenues of ₹56.8b in 2027. If met, this would reflect a reasonable 7.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 33% to ₹22.13. Before this earnings report, the analysts had been forecasting revenues of ₹57.3b and earnings per share (EPS) of ₹21.51 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for Birlasoft

There's been no major changes to the consensus price target of ₹446, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Birlasoft, with the most bullish analyst valuing it at ₹530 and the most bearish at ₹350 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Birlasoft shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Birlasoft's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 5.8% growth on an annualised basis. This is compared to a historical growth rate of 9.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Birlasoft.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Birlasoft's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Birlasoft analysts - going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Birlasoft that we have uncovered.

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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.