Birlasoft share price hits 52-week low after Q3 result; should you buy this mid-cap IT stock or avoid?

Birlasoft share price fell over 6 per cent to hit a 52-week low of ₹472.40 in intraday trade on the BSE on Wednesday, February 12, a day after the company's December quarter (Q3) result. The mid-cap IT stock opened at ₹484.95 against its previous close of ₹504.70 and touched the one-year low level of ₹472.40, falling 6.4 per cent. The stock, however, pared losses and traded 1.74 per cent down at ₹495.90 around 1:50 PM.

Birlasoft Q3 result

The IT company reported a 27 per cent year-on-year (YoY) decline in its Q3FY25 consolidated net profit to ₹117 crore from ₹161 crore in the same quarter last year.

Revenue from operations, however, rose 1.5 per cent to ₹1,362.7 crore, compared to ₹1,342.9 crore in the year-ago period.

The company's deals TCV rose 4 per cent YoY and 66 per cent QoQ to $226 million, led by strong order booking.

The company's Chief Financial Officer Kamini Shah pointed out that Birlasoft's EBITDA margin stood at 12 per cent for the quarter, representing only a marginal sequential decline even after implementing a salary increase effective October 1st, based on multiple operational efficiency initiatives.

Shah underscored that the company maintained its robust track record of strong quarterly collections and cashflow generation, resulting in a 21.7 per cent rise year-on-year in cash and cash equivalents to ₹2,055.2 crore.

Birlasoft share price trend

Birlasoft shares have lost over 40 per cent over the last year. They have been under pressure after hitting their 52-week high of ₹855.30 on February 15 last year.

On a monthly scale, the stock has been in the green only in June 2024 (up 14 per cent) and November 2024 (up 7 per cent) since last February. In February 2025 so far, the stock has lost over 7 per cent.

Birlasoft: A stock to buy?

Birlasoft reported weaker-than-expected Q3 numbers. Its revenue and profit figures disappointed Dalal Street. However, margins, which remained flat sequentially, seem to have attracted experts.

Brokerage firm Nirmal Bang maintained a buy call on the stock but cut the target price to ₹585 from ₹744 earlier.

"Birlasoft reported mixed Q3 with lower than expected dollar revenue but showed solid margin surprise. Margin execution was solid and remained flat quarter-on-quarter despite wage hikes and unexpected furloughs. This was a surprise on both Nirmal Bang and street estimates," said the brokerage firm.

The brokerage firm expects a gradual pickup in demand in 2025, with financial services showing some early signs of improvement.

However, challenges persist. Nirmal Bang highlighted that the company's clients maintain a hold-and-wait approach, especially in verticals like life sciences.

"Strategic investments in capabilities and new client acquisitions are expected to drive future growth despite near-term challenges. While the company is taking the right steps to invest in future growth areas and manage costs, near-term headwinds persist," said Nirmal Bang.

"The unexpected furloughs, project ramp downs and weak ERP (enterprise resource planning solutions) business led us to cut our dollar revenue estimates by 5.5 per cent and 5.2 per cent for FY26 and FY27, respectively. This led to a cut in our EPS (earnings per share) estimates by nearly 4 per cent each for FY26 and FY27," said Nirmal Bang.

Nirmal Bang reiterated a buy call on the stock after the recent correction in the stock price, even though it cut the target multiple and EPS (earnings per share) estimates.

Technical experts say ₹490 and ₹470 are the key level for the stock and investors should closely watch these levels to get cues about the stock's direction in the coming days.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, pointed out that Birlasoft stock found support at the 200-period EMA on the weekly chart in the last session, aligning with the S3 Camarilla pivot, which is known as a potential reversal zone.

Patel said this confluence of support levels suggests a possible trend reversal if the stock sustains above ₹490 for at least three to four sessions, potentially leading to an upward move towards the ₹550 level. Conversely, if the stock closes below ₹470, it could trigger further downside, possibly testing the ₹450 level.

"Traders should watch these key levels for directional cues," said Patel.

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