BSOFT - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: Birlasoft Ltd (BSOFT)

⭐ Investment Rating

3.8 A solid mid-cap IT player with strong fundamentals, but valuation and recent profit trends warrant caution.

📈 Long-Term Investment Potential

Birlasoft shows promise for long-term investors, especially in the IT services space. Here's how the key metrics stack up

ROE (15.6%) & ROCE (21.0%): Strong capital efficiency, well above industry averages.

Low Debt-to-Equity (0.04): Virtually debt-free, enhancing financial stability.

Dividend Yield (1.59%): Decent for a growth-oriented tech firm.

Stock P/E (22.4) vs Industry PE (29.1): Slightly undervalued.

PEG Ratio (6.56): High, indicating expensive valuation relative to earnings growth.

Quarterly Profit Decline (-32.2%): Needs monitoring, but not alarming given sector cyclicality.

Despite a recent dip in profits, Birlasoft’s fundamentals suggest resilience and potential for long-term compounding.

🎯 Ideal Entry Price Zone

Indicator Value

50 DMA ₹419

200 DMA ₹473

RSI 46.3 (neutral)

MACD -7.08 (bearish)

Support Zone ₹375–₹395

Resistance ₹445–₹460

Suggested Entry Zone: ₹375–₹395 This range offers a technical cushion and aligns with recent volume spikes and support levels.

🧭 Exit Strategy / Holding Period

If you're already holding BSOFT

Holding Period: 3–5 years, ideal for compounding returns as digital transformation accelerates.

Exit Strategy

Partial Exit near ₹475–₹500 if PEG remains elevated and profit growth stagnates.

Hold if ROE sustains above 15% and PEG drops below 2.5.

Reassess post Q2 FY26 results (expected in November 2025) for margin recovery and client pipeline updates.

Would you like me to compare Birlasoft with peers like Persistent Systems or Coforge to see how it stacks up in the mid-cap IT space?

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