Birlasoft margin slips as costs outpace revenue growth in Q2FY27
Revenue rose 2.67% qoq, but higher expenses, interest and depreciation reduced net profit by 0.84%; other income remained material.
Filed 28 Oct 2026, 17:15 IST · after market close · Birlasoft Ltd (BSOFT)
Key takeaways
- Birlasoft's consolidated operating margin fell 0.95 percentage points QoQ to 15.20% as expenses grew 3.83% against revenue growth of 2.67%.
- Net profit declined 0.84% QoQ to Rs 159.65 cr even as the tax rate eased 0.39 percentage points, with interest expense up 80.00%.
- Other income contributed 18.88% of pre-tax profit, while the 15.20% margin was 2.59 percentage points below the 17.79% median for 31 IT peers.
Price around the results
Revenue growth did not convert into operating profit
Birlasoft's consolidated revenue grew 2.67% QoQ, but operating profit fell 3.34%, showing weaker conversion of incremental revenue into earnings. Management said Digital & Data grew 3.4% QoQ and ERP grew 2.9% during Q2FY27, providing the main disclosed pockets of growth.
Higher costs and financing charges weighed on earnings
Expenses grew 3.83%, faster than revenue, which narrowed operating margin by 0.95 percentage points to 15.20%. Interest expense rose 80.00% and depreciation increased 29.71% QoQ, adding pressure below the operating line. Other income accounted for 18.88% of pre-tax profit, so reported profit included a material non-operating contribution.
Margin trails IT peer median after a sequential decline
Operating margin fell from 16.15% in Q1FY27 to 15.20% in Q2FY27, while net profit declined 0.84% despite a 0.39-percentage-point easing in the tax rate. Birlasoft's margin was 2.59 percentage points below the 17.79% median among 31 IT companies that had reported, placing it 11th from the bottom.
Results came after the market close
The results were filed after market close on 28 October 2026. The stock's immediate response is therefore not assessed here.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹1,416 cr | ₹1,379 cr | +2.67% |
| Other income | ₹42 cr | ₹29 cr | +46.33% |
| Expenses | ₹1,201 cr | ₹1,157 cr | +3.83% |
| Operating profit | ₹215 cr | ₹223 cr | -3.34% |
| Operating margin (%) | 15.20% | 16.15% | — |
| Interest | ₹8 cr | ₹4 cr | +80.00% |
| Depreciation | ₹25 cr | ₹19 cr | +29.71% |
| Profit before tax | ₹225 cr | ₹228 cr | -1.39% |
| Tax | ₹65 cr | ₹67 cr | -2.72% |
| Net profit | ₹160 cr | ₹161 cr | -0.84% |
| EPS (₹) | ₹5.67 | ₹5.72 | -0.87% |
Operating margin of 15.20% compares with a Information Technology sector median of 17.79% across 31 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +11.89% | +10.84% |
| Next session | +5.42% | — |
Volume on the results session was 21.07× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Digital and Data grew 3.4% QoQ and ERP grew 2.9% QoQ during Q2FY27.
What to watch
- Whether operating margin holds above 15.20% next quarter.
- Whether expense growth moves below the 3.83% recorded this quarter, against revenue growth of 2.67%.
- Whether other income's contribution falls below 18.88% of pre-tax profit.