Birlasoft shares surge 12% after Q2 results; Nuvama raises target price | technical experts flag key levels to watch

Birlasoft shares surged more than 12% on Thursday, 29 October, after the IT services company reported a strong rise in net profit for the September quarter of FY27, alongside an increase in revenue and higher order bookings.

The company’s consolidated net profit climbed 37.5% year-on-year (YoY) to ₹160 crore in Q2 FY27, compared with ₹116 crore in the corresponding quarter last year. Revenue from operations grew 6.6% to ₹1,416 crore from ₹1,329 crore a year earlier.

However, operating profitability remained under pressure. Earnings before interest and tax (EBIT) declined 1.4% YoY to ₹190.3 crore from ₹193 crore, while the EBIT margin narrowed to 13.4% from 14.5% in the year-ago quarter.

Birlasoft’s board also recommended an interim dividend of ₹3 per equity share, equivalent to 150% of the share’s face value of ₹2, for FY27. The dividend will be paid within 30 days of the board’s declaration, in accordance with the applicable provisions of the Companies Act, 2013.

Commenting on the results, Angan Guha, Chief Executive Officer and Managing Director of Birlasoft, said the company’s revenue performance improved during the quarter, supported by growth in key accounts and across its manufacturing, banking, financial services and insurance (BFSI), and lifesciences and services (LSS) verticals.

He added that the company’s digital, data and enterprise resource planning (ERP) service lines also contributed to growth. Birlasoft’s total contract value (TCV) of order bookings for the first half of FY27 rose 15% year-on-year, indicating an improvement in business wins.

Nuvama Institutional Equities said Birlasoft delivered a decent performance in Q2 FY27, with constant-currency (CC) revenue growing 2.1% quarter-on-quarter, compared with its estimate of 0.5% growth. Revenue declined 1.1% year-on-year in constant-currency terms. The earnings before interest and tax (EBIT) margin contracted 130 basis points sequentially to 13.4%, in line with the brokerage’s estimates.

However, deal wins remained subdued. Total contract value (TCV) stood at $116 million, down 31% quarter-on-quarter but up 8% year-on-year. Net new deal bookings came in at $47 million, declining 18% sequentially while rising 18% from a year earlier.

The brokerage said Birlasoft showed signs of recovery during the quarter, supported by improving execution, although softer deal wins remained a concern. It added that sustained growth would depend on stronger contract signings and the conversion of artificial intelligence-led opportunities.

Nuvama revised its earnings per share (EPS) estimates for FY27 and FY28 upwards by 2% and 2.7%, respectively, factoring in higher growth expectations. It retained its ‘Hold’ rating on the stock but raised the target price to ₹300 from ₹280, valuing the company at 12 times its average estimated price-to-earnings multiple for FY28–FY29. Birlasoft is currently trading at 13 times its FY28 estimated earnings, according to the brokerage.

Birlasoft share price today opened at an intraday low of ₹312.85 per share on the BSE, the stock touched an intraday high of ₹343.75 per share.

Gaurav Arora, Head of Research, SAHI, said, Birla Soft has shown a double bottom breakout at the ₹330 level and is comfortably trading above its 20,50-day EMAs. The immediate resistance to watch is ₹358, and holding above this level opens up the potential for further upside. The structure currently favours continued strength, provided this resistance is cleared convincingly.

Further, Shitij Gandhi, AVP - Equity Technical Research, SMC Global Securities, added that Birlasoft is showing encouraging signs of recovery on the daily chart after forming a potential double-bottom pattern around ₹270–275 zone , suggesting that selling pressure may be easing.

"The stock has witnessed a sharp rebound towards ₹332 and is attempting to move beyond its falling trend line resistance. However, the 200-day moving average around ₹337-340 zone remains an important hurdle for further upside. A sustained breakout above this zone could attract fresh buying interest and push the stock towards ₹355–360, followed by ₹390 in the coming sessions. On the downside, immediate support is placed around ₹310–313, while ₹297 remains a crucial level to watch," said Gandhi.

Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.

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HomeMarketsStock MarketsBirlasoft shares surge 12% after Q2 results; Nuvama raises target price | technical experts flag key levels to watch

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