kpit_technologies_290813
TRANSCRIPT
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7/29/2019 KPIT_Technologies_290813
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Sector : IT
Sector view: Positive
Sensex: 18,129
52Weekh/l(Rs): 145/92
Marketcap(Rscr): 2,545
6mAvgvol(000Nos): 346
Bloombergcode: KPITIN
BSEcode: 532400
NSEcode:
KPIT
FV(Rs): 2
PriceasonAug29,2013Companyratinggrid
Low High
1 2 3 4 5
EarningsGrowth
CashFlow
B/SStrength
Valuationappeal
Risk
Sharepricetrend
50
75
100
125
150
Aug12 Dec12 Apr13 Aug13
KPITCummins Sensex
Shareholdingpattern
0
20
40
60
80
100
Sep1 2 Dec12 Mar1 3 J un13
Promote rs FIIs Othe rs
Rating: BUYTarget(13 months): Rs148CMP: Rs131Upside: 12.9%ExitTrigger*: Rs118
August29,2013
Research Analys t :
Expr ess Idea
*Exittriggeristhepricelevelbelowwhichinvestorshouldexitposition
KPIT Technologies Ltd
Momen tum to con t inue d r iven by s t rong dea l p ipe l ine and focused
cl ien t m ining
KPITTechnologiesthroughitsconsistentexecutionandnichecapabilitieshas
registered sustained revenue growth. This is evident in the 30%+ revenue
growthin
FY13
despite
the
weakness
in
its
SAP
business
(~25%
of
revenues).
Thiswasonthebackofstrongdemandtraction inIESandAutoengineering
businesswhichgrewat5.5%/5%CQGRoverthesameperiod.Morerecently,
thedealfunnelhasshownsubstantialimprovement(+50%inlast69months)
with 67 large deals in the pipeline (US$1030mn). SAP and Automotive
business are also expected to pickup in H2 FY14 further supporting the
revenuetraction.Froma longertermperspective,KPITs increased focuson
miningitsmarqueeclientbasethroughitsBusinesstransformationservicesis
expectedhelpmaintainthedecentbusinesstraction.
Opera t ing m arg in to expan d su ppor ted by SAP bus ines s , rupee and
oper a t ional leve rage
KPITsoperatingprofitabilitysufferedoverFY1112onthebackofintegration
oflowmarginacquisitions,higheronsitegrowthandcontinuedinvestments.
InFY13too,marginhadtobearthebruntduetotheimpactoftechnological
reset intheSAPbusiness.Goingforward,owingtothe improvingoffshoring
(especiallyintheSAPbusiness),weakrupeeandoperationalleveragedueto
strong volume led traction (due to deal rampups) in key SBUs, we expect
margin performance to improve. Improving client mining as seen in the
9%/7%revenueCQGRforTop5/Top10clients(exCummins)shouldalsobode
well from the margin perspective. Additionally, higher locals /green card
owners
amongst
KPITs
US
employee
base
may
result
in
relatively
lower
impactofprotectionistmoves.
Valuation s a t 8x FY15E earn ings a re at tr active ; Maintain BUY
Consistent execution and continued traction which has been a hallmark of
KPITs business performance over past two years, should continue going
forwardtoo.Ourexpectation issupportedbythe improvingoveralldemand
environmentintheUS,bettermanagementcommentaryandgreenshootsin
discretionaryservicesspending.Consequently,weexpectcompanytowitness
15%/27% dollar revenue/INR EPS CAGR over FY1315E. P/E valuations at 8x
FY15Eearningsareattractive.
FinancialsummaryY/e31Mar(Rsm) FY12 FY13 FY14E FY15ERevenues 15,000 22,386 26,654 31,232
yoygrowth(%) 49.0 49.2 19.1 17.2
Operatingprofit 2,171 3,641 4,467 5,167
OPM(%) 14.5 16.3 16.8 16.5
ReportedPAT 1,453 1,990 2,657 3,209
yoygrowth(%) 53.3 36.9 33.6 20.8
EPS(Rs) 8.2 10.4 13.9 16.8
P/E(x) 16.5 13.0 9.7 8.0
Price/Book(x) 3.4 2.5 1.9 1.6
EV/EBITDA(x) 11.4 7.4 5.5 4.4
RoE(%) 20.6 22.9 22.3 21.5
RoCE(%) 22.4 25.6 26.2 26.2
Source:Company,IndiaInfolineResearch
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7/29/2019 KPIT_Technologies_290813
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AnExpress Idea isarecommendationbasedonourviewonthesectorand/orstockfromaneartomediumtermperspective,typicallylessthanthreemonths.Theviewcanbebasedonfundamentalsand/ortechnicalparametersforthestockand/orourviewonthesectoronthewhole.
Publishedin2013.IndiaInfolineLtd2013Thisreport isforthepersonal informationoftheauthorisedrecipientand isnotforpublicdistributionandshouldnotbereproducedorredistributedwithoutprior
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