Birlasoft Ltd (BSOFT)
CyclicalFairStock Score: 72/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹312.05 |
| Market Cap | ₹8,724.28 Cr |
| P/E Ratio | 15.29 |
| ROCE | 20.95% |
| ROE | 13.36% |
| Dividend Yield | 2.08% |
| Profit Growth | 299.95% |
| Debt/Equity | 0.03 |
| Sales Growth | 32.21% |
| Free Cash Flow | ₹149.98 Cr |
| Promoter Holding | 40.51% |
| 52-Week Range | ₹270.2 — ₹474 |
| Sector | IT - Software |
| Book Value | ₹147.16 |
Strengths
- Debt-to-equity of 0.04 shows a very conservative balance sheet.
- Altman Z-Score of 4.00 indicates low bankruptcy risk.
- Piotroski F-Score of 7/9 points to sound financial health.
- ROCE of 20.95% suggests efficient allocation of capital.
- Promoter holding of 40.51% aligns management with minority shareholders.
Concerns
- Sales growth of -2.63% and profit growth of -19.18% show a shrinking business.
- Market price of ₹384.70 is far above Graham Number ₹216.63 and DCF value ₹244.64, leaving no margin of safety.
- P/E of 22.34 and P/B of 3.09 are rich given negative growth.
- Latest quarter net margin of ~8.9% and ROE of 13.36% are only moderate for the valuation.
AI Analysis
At ₹384.70, Birlasoft is not a bargain. Graham said price is what you pay, value is what you get. Here the Graham Number is ₹216.63 and the DCF intrinsic value is ₹244.64, both meaningfully below the current market price. The indicated margin of safety is deeply negative, so I cannot justify deploying capital today. The balance sheet does have virtues: debt/equity is just 0.04, Altman Z-Score is 4.00, and ROCE is 20.95%. Promoter holding of 40.51% is reassuring, and the Piotroski F-score of 7/9 suggests the company is not financially fragile. Free cash flow of ₹150 Cr is positive, but against a ₹10,904 Cr market cap it is modest. The problem is growth: sales fell 2.63% and profit fell 19.18%. Latest quarter net profit of ₹120 Cr on sales of ₹1,348 Cr translates into only about 8.9% net margin. ROE of 13.36% is decent but not outstanding. At P/E of 22.34 and P/B of 3.09, the market is still paying a growth premium while the business shrinks. The 1.67% dividend gives some comfort, but the negative EV/EBITDA makes me want to examine earnings quality more closely. The FairStock score of 44/100 calls it mixed, and I agree. This is a cyclical software-services business at an unattractive price. Even a decent business with low debt cannot excite me without margin of safety. I will wait for a lower price or demonstrable revival in growth before acting.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer