Birlasoft Ltd

Rating action

• Reaffirmed Birlasoft bank facilities; outlook remains Stable.

Instruments / Ratings

• Long-term bank facilities ₹307 crore: CARE AA+; Stable.
• Long-term/Short-term facilities ₹20 crore: CARE AA+; Stable / CARE A1+.
• Short-term facilities ₹25 crore: CARE A1+.

Rationale

• Diversified IT services with multiple verticals and end-user segments.
• Part of CKA Birla Group; strong financial flexibility.
• Healthy capital structure; robust debt coverage; liquidity strong with ₹2,878.6 crore.
• FY26 TOI declined 1.2% in INR; USD terms down 6.5%.
• Q1FY27 TOI up 7.4%; PBILDT margin 16.15%.
• TCV US$658 million in FY26; US$168.7 million in Q1FY27.
• US revenue share above 80%; top five customers 42%; top ten 55%.
• Competitive IT landscape; FX exposure and attrition risk.

Outlook & Sensitivities

• Outlook: Stable.
• Upgrade possible with scale growth and margins near 20%.
• Downgrade risk from debt-funded acquisitions raising net debt/PBILDT above 1x.
• Slower vertical growth or regulatory challenges could pressure margins.

Material changes

• No material change; rating reaffirmed with Stable outlook.

Financial snapshot

• FY26 TOI ₹5,310 crore; PBILDT ₹801 crore; PAT ₹518 crore.
• Free liquidity ₹2,878.6 crore as of 30 Jun 2026.
• Gearing 0.04x; TD/PBILDT 0.18x; interest coverage 40.88x FY26.
• Q1FY27 TOI ₹1,379 crore; PBILDT ₹223 crore; PBILDT margin 16.15%.

Birlasoft Ltd – Trading window shall remain closed from October 1, 2026, till the completion of 48 hours after the declaration of the Financial Results for the quarter and half-year ended September 30, 2026.

Birlasoft FY2025-26 Sustainability Highlights

• Sustainability Report FY2025-26 published; Accelerating Impact; aligned with GRI 2021, UN SDGs, UNGC, SASB, IFRS S1/S2.
• Consolidated revenue ₹5,310 crore; EBITDA margin 16.3%; PAT ₹518.4 crore; cash ₹26,373 crore; headcount 11,363.
• Net Zero by 2040; SBTi validated near- and long-term targets; renewable share 15% of total electricity; Pune 100% renewable.
• Scope 1 down 4%, Scope 2 down 14%; energy intensity 0.51 GJ per Mn INR turnover (consolidated).
• Zero Liquid Discharge across premises; water withdrawal down 9%; 100% e-waste recycled; waste-to-landfill reduction ongoing.
• Board of 7 with 3 women; 57.14% independent; 100% supplier code of conduct acknowledgement; 94% COBEC training.
• ISO 27001/27701 recertified; SOC 2 Type II; NIST CSF 4.07/5.
• EcoVadis Silver; CDP B-; NSE Leader; Morningstar Low ESG Risk; S&P 97th percentile.
• CSR expenditure ₹70.1 million; Disha Phase III scholarships 623; cancer care expansion; 700+ saplings distributed.
• New hires 3,705; 68% from internal; turnover 14.9%; 25.4% female; 86% senior management from local community.

Cessation of Senior Management Personnel

• Ankur Vaish, Chief Strategy Officer, resigns to pursue other opportunities; ceases as SMP on Sept 19, 2026.

Capital / Securities

• Board approved allotment of 67,467 equity shares to employees under ESOP-2022 on Aug 27, 2026.
• Paid-up capital now Rs 559,334,112, divided into 279,667,056 equity shares of Rs 2.

Stamp Duty Adjudication

• Penalty of Rs 1,23,14,040 imposed on Birlasoft Limited and KPIT Technologies Limited for 4-day NCLT order lodgement delay.
• Order receipt date: August 26, 2026.
• Penalty to be paid per process; no material impact on financials.
• Authority: Collector of Stamps.

Event

• Birlasoft named 'Enterprise Innovator' in HFS Horizons legacy modernization report.
• HFS Horizons Horizon 2 recognition for end-to-end modernization at scale.

Capabilities

• Cogito AI platform comprises nine agents for code generation, defect triage, and test automation.
• 450+ application modernizations and 75+ full-stack programs delivered across industries.
• Accelerators include SmartTRAM, DataSwitch, BTruBI, and DataCRAFT.
• 40% faster coding and up to 35% deployment effort savings.

Outcomes & capacity

• 2,000+ certified cloud engineers; 25+ years engineering experience; 80% repeat business.
• 27 global locations and 7 centres of excellence.