Birlasoft Hits 52-week High as Company Signs AI Partnership - Views on News from Equitymaster

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  • Jun 9, 2021 - Birlasoft Hits 52-week High as Company Signs AI Partnership

Birlasoft Hits 52-week High as Company Signs AI Partnership

Jun 9, 2021

Birlasoft shares surged 12% in intraday trade today on the BSE after the CK Birla Group company partnered with artificial intelligence company Regulativ.ai.

As per the partnership, Birlasoft will develop a new artificial intelligence (AI)/machine learning (ML)-based cyber-regulatory reporting platform with the company.

In alignment with Birlasoft's strategy to ensure that customers realise utmost value from their digital transformation initiatives, the co-developed platform will help regulated enterprises gain a deeper understanding of their cyber regulatory compliance risks.

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The platform will also provide them with actionable reports to mitigate risks and ensure compliance.

In a press release, Birlasoft said,

    Digital transformation has unleashed a high volume of cyber threats, making cybersecurity and compliance a top priority for CXOs, and making it critical for businesses to ensure their cyber-regulatory compliance roadmap is in place.

Birlasoft believes that the Regulativ.ai platform fits well with the company's focus to grow the banking, financial services, and insurance segments, where cybersecurity is a key focus.

In addition, as organizations across other regulated industries accelerate their digital transformation, cybersecurity will become fundamental for future business resiliency.

March quarter profit rises 43%

For the March 2021 quarter, the company reported a 43.3% year on year (YoY) rise in consolidated net profit at Rs 989 m. It had posted a profit of Rs 690 m in the same period last year.

This was on the back of operational efficiencies as the company's EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin improved 4% YoY to 16.9%.

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The company's management said the all-around improvement on all operating metrics is very reassuring and sets the foundation for continued momentum into FY22.

However, the company reported a marginal decline in revenue from operations to Rs 9 bn from Rs 9.1 bn in the year-ago period.

Key Financial Highlights

With due focus on a robust customer-centric strategy to win more transformational and long-term deals, the management is confident of accelerated growth in FY22 and beyond.

In 2021, Birlasoft reported a record deal win rate of US$888 m in total contract value (TCV), with the highest ever order book of annuity and digital deals.

The company is eyeing the US$1 bn mark in total income.

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How the stock markets reacted to Birlasoft's news

Shares of Birlasoft opened higher at Rs 382 on the BSE and at Rs 381.9 on the NSE today.

The stock rallied 12% in intraday after the company announced the partnership with Regulativ.ai

The scrip also touched its 52-week high of Rs 421. It had touched its 52-week low of Rs 77 on 12 June 2020.

In the past month, the stock price of the global enterprise digital and IT services company has rallied 68%, as compared to a 6% gain in the S&P BSE Sensex.

Shares of the company have also delivered a 350% return in the last year.

About Birlasoft

Birlasoft is a software development and IT consulting firm that combines the power of domain, enterprise and digital technologies to reimagine business processes for customers and their ecosystem.

The company is a part of the diversified CK Birla Group and has customers predominantly in banking, financial services, and insurance, life sciences and services, energy resources and utilities, and manufacturing.

The company's registered office is in Pune.

For more details about the company, you can have a look at Birlasoft's factsheet and Birlasoft's quarterly results on our website.

You can also compare Birlasoft with its peers.

Birlasoft vs Wipro

Birlasoft vs Infosys

Birlasoft vs Vakrangee

Birlasoft vs Firstsource Solutions

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Ayesha Shetty

Ayesha Shetty is a financial writer with the StockSelect team at Equitymaster. An engineer by qualification, she uses her analytical skills to decode the latest developments in financial markets. This reflects in her well-researched and insightful articles. When she is not busy separating financial fact from fiction, she can be found reading about new trends in technology and international politics.

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