1. Opening Hook
Birlasoft entered Q2 FY26 with a “barely-there” revenue bump, but margins doing yoga stretches that would make CFOs jealous. While global IT peers wrestled with sluggish macros, Birlasoft pulled amargin miracle— or was it “one-off magic”? Angan Guha swore it wasn’t spreadsheet sorcery. Traders heard “AI + efficiency” and pretended not to notice the 0.1% revenue growth. Buckle up — things get spicy later with tax gymnastics, deal spillovers, and some straight talk about ERP heartbreak.
2. At a Glance
- Revenue up 0.1% QoQ:Blink and you’ll miss the growth.
- EBITDA margin up 369 bps to 16%:One-off fairy dust meets forex luck.
- EBITDA up 34% QoQ:CFO calls it “operational efficiency.” Markets call it magic.
- Cash up 26% YoY:Collections so good, even the taxman got jealous.
- DSO improved to 55 days:Best in class, says management — because everyone else stopped paying faster.
- Interim dividend ₹2.50/share:The “thank-you” note before Q3 furloughs hit.
- Stock unmoved:Because even AI couldn’t decode “0.1% growth.”
3. Management’s Key Commentary
“We delivered a healthy operating quarter with strong margin performance.”(Translation: Revenue refused to grow, so margins had to overcompensate.😏)
“Revenue grew 0.1% in USD terms but 3.4% in rupee terms.”(Ah, the magic of forex — when growth hides behind exchange rates.)
“Our EBITDA margin expanded from 12.4% to 16%.”(Part one-offs, part divine intervention.)
“250 bps of this margin jump was one-off and forex gains.”(So, the steady-state margin is closer to ‘meh’ at 13.5%.)
“We let go of low-profitability tail accounts.”(Translation: Fired clients before they fired us.)
“ETR rose due to U.S. federal tax provisions.”(Because Uncle Sam wanted a bigger slice of the Birlasoft pie.)
“Manufacturing remains weak; BFSI and Life Sciences offset softness.”(The IT industry’s version of ‘our top-order collapsed, but the tail survived.’)
“Expect sequential growth in Q3 despite furloughs.”(Hope is not a strategy, but it’s still Q2’s best quote.)
4. Numbers Decoded
| Metric | Q2 FY26 | QoQ Change | Comment |
|---|---|---|---|
| Revenue | $150.7 mn | +0.1% | “Flat is the new up.” |
| EBITDA | $24.2 mn | +29.9% | CFO’s fitness goal achieved. |
| EBITDA Margin | 16% | +369 bps | Thanks, forex gods. |
| Net Profit | ₹1,477 mn (adjusted) | +? | Lost in tax translation. |
| Cash & Equivalents | ₹23,434 mn | +26% YoY | Collections therapy worked. |
| DSO | 55 days | – | CFO’s bragging rights. |
| TCV Signed | $107 mn | – | But wait, deals “spilled” into Q3. |
Commentary:Revenue hit a speed bump, but EBITDA hit the gym. Margins bulked up from cost cuts and one-offs. CFO Chandru hinted “true” margin sans magic is ~13.5%, but who’s counting when optics look good?
5. Analyst Questions
Kotak AMC:“How will you grow with weak deal wins?”→CEO:“Two deals just missed the quarter-end. Don’t worry, they’ll arrive fashionably late.”
Emkay Global:“Is your $850 mn annual deal target alive?”→CEO:“Alive, yes. Achievable? Depends on how optimistic you are after chai.”
Nuvama:“ERP is falling off a cliff.”→CEO:“It’s tied to manufacturing. We’re rebuilding… slowly… spiritually.”
Vallum Capital:“Any buyback or clarity on taxes?”→CEO:“We’ll think about it. After Q3. Maybe.”
Equirus:
