Ashish Kacholia: Ashish Kacholia, 2 others booked profit on this IT stock in June qtr

NEW DELHI: Three seasoned investors booked profit in shares of IT firm in the June quarter, following a 550 per cent rally in the stock from its March lows.

This was the second straight quarter, when ace investor Ashish Kacholia trimmed his stake in the IT firm. In the April-June period, Kacholia cut it to 1.17 per cent from 1.80 per cent in the March quarter and 2.35 per cent in the December quarter.

Birlasoft shares account for Rs 125 crore of Kacholia’s Rs 1,600-odd crore portfolio value, as per data publicly available with Trendlyne.

Another seasoned investor Mukul Agrawal’s stake in the company has fallen below 1 per cent from 1.08 per cent at the end of the March quarter. It is not clear whether Agrawal completely exited the counter.

In the case of Ashish Dhawan, whose stock portfolio is valued over Rs 2,600 crore, his stake in the IT firm has come down to 2.88 per cent from 3.61 per cent at the end of the March quarter. Dhawan was holding 3.6 per cent stake in this stock for at least five quarters.

At the prevailing price, his stake is worth Rs 308 crore.

Brokerage Anand Rathi expects the IT firm to report an 80.2 per cent YoY rise in net profit at Rs 101.50 crore. On a sequential basis, it sees profit growing 2.6 per cent, and sales 3.9 per cent to Rs 938.30 crore. Ebit margin is seen falling 82 basis points sequentially, but expanding 409 basis points on a YoY basis.

Emkay Global sees profit rising 80 per cent YoY (5.3 per cent QoQ) to Rs 104.20 crore on a 3.5 per cent YoY (4.9 per cent QoQ) rise in sales at Rs 947 crore. The brokerage sees Ebitda margin at 16.2 per cent against 16.9 per cent in the March quarter and 15.7 per cent in the year-ago quarter.

“We expect 4.1 per cent CC QoQ revenue growth with flat cross-currency movements. Revenue growth was impacted by the second wave of Covid and higher absenteeism. EBIT margins are expected to decline by 90 basis points due to the Covid impact, absence of reversal of provisions (100 bps), higher attrition and recruitment costs,” Emkay said.

Analysts say investors should watch out for order wins, deal pipeline, commentary on margin trends through FY22 and attrition rates, and watch the steps taken by the management to manage supply-side challenges.

“We look forward to commentary on AWS partnership upgrade, which can help in driving cloud revenue. Update on an increase in annuity business and core IMS business. Investors must watch out for: i) outlook; deal momentum, tenure and pricing; attrition level; and Azure and AWS partnerships,” Edelweiss said.

Emkay has a ‘buy’ rating on the stock with a price target of Rs 450.