Demand environment still sluggish, FY25 won’t be any better than FY24: Birlasoft CEO

Mid-tier IT firm Birlasoft of the CK Birla Group sees the demand environment continuing to be sluggish and expects FY25 to follow a similar trajectory as FY24, said Angan Guha, CEO and MD, Birlasoft.

The company reported net profit of ₹180 crore in Q4, a 11.8 per cent quarter-onquarter rise, and 60.5 per cent year-on-year rise, largely due to rise in non-core income.

“The challenges will continue, the client budgets are pretty much where they were. The discretionary spend is getting pushed out, but there will be deals on the table on the cost side, which we will be focussed on. It is going to be volatile, but our job is to deliver industryleading growth as we take one quarter at a time,” Guha told businessline. In Q4, Birlasoft’s operating margin stood at 14.7 per cent, up 33 bps from Q3.

Guha aims to keep the margins range bound going further, and focus more on making investments for the long term. “Even this year, we will be focusing on putting in a lot of money on our own tech transformation. We will put money in building our capabilities both on sales, delivery and domain technology. I’m going to keep utilising these slow years to keep investing in our business,” Guha said. Birlasoft is also looking to make inorganic investments. Guha notes that although the company does not have an asset now, it is working with partners to identify assets and over the next four-six quarters, it will be able to announce an acquisition.

We’ve generated positive cash flow every quarter and today we have about ₹1,800 crore on our books

POSITIVE CASH FLOW

“We’ve generated positive cash flow every quarter and today we have about ₹1,800 crore on our books, so I’m feeling more confident that now we can buy and integrate a company,” he said.

The company plans to hire 1,000 in FY25 through on-campus and o¢-campus routes. Utilisation rate, which was at an all-time high of 87.1 per cent in Q3, dipped in Q4, and is tentatively expected to dip a little more in the next quarter, saidGuha.

ANGAN GUHA

CEO and MD, Birlasoft