Birlasoft Limited , a global enterprise digital and IT services company, has addressed recent regulatory changes to H-1B visa applications in the United States, stating that the company does not foresee any immediate significant impact on its operations or customer service capabilities.

Regulatory Changes and Company Response

The company's statement comes in response to a recent U.S. Executive Order and subsequent memorandum from the U.S. Citizenship and Immigration Services regarding H-1B visa applications. These changes have raised concerns across the IT services industry, particularly for companies relying on skilled foreign workers.

In an official communication to the BSE Limited and the National Stock Exchange of India Ltd., Birlasoft emphasized its commitment to delivering exceptional customer service and ensuring service continuity. The company stated, "At this time, we do not anticipate any immediate significant impact of the aforesaid regulatory changes on our operations or our ability to serve our customers."

Proactive Measures and Operational Resilience

To address potential challenges and mitigate risks associated with the regulatory changes, Birlasoft outlined several proactive measures:

1. Strengthening global delivery capabilities
2. Enhancing talent sourcing processes
3. Improving deployment processes

These initiatives are aimed at bolstering the company's operational resilience in the face of evolving immigration policies.

Ongoing Monitoring and Future Updates

Birlasoft assured stakeholders that it continues to monitor developments related to the H-1B visa regulations closely. The company has committed to providing further updates as appropriate, maintaining transparency with investors and clients.

Sneha Padve, Company Secretary & Compliance Officer of Birlasoft, signed the official communication, underscoring the company's adherence to regulatory disclosure requirements.

Conclusion

While the full implications of the U.S. regulatory changes on the IT services sector remain to be seen, Birlasoft's proactive approach and clear communication demonstrate the company's confidence in its ability to navigate potential challenges. As the situation evolves, stakeholders will be watching closely to see how Birlasoft and other companies in the sector adapt to the changing landscape of global talent mobility.

Birlasoft Limited , a global enterprise digital and IT services company, reported a 1% sequential decline in revenue for the first quarter, as the company navigates through challenging market conditions and client-specific headwinds.

Performance Highlights

• Revenue stood at $150.70 million, down 1% quarter-on-quarter in dollar terms.
• EBITDA margin came in at 12.40% for the quarter.
• Total contract value (TCV) of deal wins reached $141.00 million, with over half comprising new deals.
• Cash and cash equivalents increased to $266.60 million, up 16% year-on-year.

Segment Performance

Three out of Birlasoft's four verticals showed growth:

• BFSI (Banking, Financial Services, and Insurance): Marginal growth
• Life Sciences & Services: 1.40% quarter-on-quarter growth
• Energy & Utilities: 1.90% quarter-on-quarter growth

However, the Manufacturing vertical, which is the company's largest, declined by 4% due to project completions, ramp-downs, and client insourcing.

Service Line Performance

• Digital & Data business: 2.60% quarter-on-quarter growth
• ERP (Enterprise Resource Planning) business: Declined, reflecting its correlation with the Manufacturing vertical
• Infrastructure business: Witnessed a decline due to project completion

Management Commentary

Angan Guha, CEO and Managing Director of Birlasoft, stated, "While we are still navigating through the challenging demand environment, I believe our ongoing efforts to drive operational efficiencies, generate healthy cash flows, and invest prudently in the business positions us well to benefit from a recovery in demand as and when that happens."

Guha also highlighted the company's focus on building pipeline and delivering a strong order book, aiming for sequential growth in the coming quarters.

Financial Outlook

• The company expects sequential growth in Q2.
• Management anticipates challenging market conditions to continue affecting performance throughout the year.
• The effective tax rate increased to 35.90% from historical levels of 25-26% due to provisions for higher tax, expected to normalize in the following fiscal year.

Strategic Initiatives

Birlasoft is focusing on:

1. Mining existing top 40 accounts
2. Adding new logos to diversify the client base
3. Working with partners like SAP and Oracle to revitalize the ERP business

Leadership Changes

• CFO Kamini Shah announced her departure for personal reasons.
• Chandrasekar Thyagarajan will take over as the new CFO, effective August 8.

Future Outlook

Despite current challenges, Birlasoft remains committed to its long-term growth strategy. The company is investing in emerging technologies, with recent wins in GenAI and Agentic AI solutions demonstrating its enhanced capabilities in these areas.

As Birlasoft navigates through the current market uncertainties, it maintains a focus on operational efficiency, cash flow generation, and strategic investments to position itself for future growth opportunities.