Birlasoft Ltd. share price target

3QFY19 revenue declined 1.7% QoQ in constant currency (3% miss). While Engineering SBU (43% of revenue) grew 6.4% QoQ, IT Business dragged with a decline of 7.5% QoQ 16 January 2019 due to completion of a few large projects. EBITDA margin shrank 60bp QoQ (excluding translation loss) 110bp miss due to weaker revenue. PAT declined 25% QoQ (+6% YoY) to INR656m, 14% below our estimate due to the operational miss. 3QFY19/9MFY19 data of the IT and Engineering businesses. The key surprise for us was the 9MFY19 EBITDA margin in Engineering Services, which stood at 11.8% v/s 15.4% for IT Services.

Maintain BUY with TP of Rs 285, 13x Sep-20E EPS. KPIT Tech (KPIT) posted in-line revenue (PES, Digital and Product led growth), profitability beat (business-mix, utilisation). Revenue came at USD 152.5mn, 1.3/7.4% QoQ/YoY. EBITDA% stood at 13.6%, +147bps QoQ and margins expected to improve ahead with lower G&A.; Revenue guidance of 8 to 10% YoY maintained (9.7% YoY in 1HFY18), while EBITDA margin guidance raised to 14% (ex-transaction expense) vs. 11.5 to 12.5% earlier.

ICICI Securities Ltd | Retail Equity Research KPIT reported better than expected margin performance in Q2FY19 while dollar revenues were in-line with our estimates. Revenues in constant currency grew 2.9% sequentially on the back of healthy growth in engineering services. Among geography, dollar revenue growth was led by Europe (15.5% QoQ). EBITDA margins surprised on the positive side and expanded 150 bps QoQ to 13.6% (above our estimate of 11.1%). Better than...

Sustainable margins to aid Profitability; Upgrade to BUY KPIT reports a muted Q2FY19 with USD revenue improving by 1.3% QoQ (2.9% QoQ in CC terms) to USD 153mn (DCMe: USD 153mn) led by engineering, technologies and products & platforms business. Rupee revenues improved 6.4% QoQ to ` 10,789mn (DCMe: ` 10,691mn) helped by INR depreciation. EBIT margin improved 73bps QoQ to 10.2% (DCMe: 7.9%) supported by operational efficiencies and FX tailwind which offset the negative impact of wage hike during the quarter. PAT improved 6%...

1Q Action Replay: Revenue Below Estimate, Margin Exceeds Estimate KPIT Technologies (KPIT) has delivered a mixed performance in 2QFY19. While its USD revenue grew by 1.3% QoQ to US$152.5mn (1.4% below our estimate), EBITDA margin rose by a robust 147bps QoQ. In CC terms, revenue rose by 2.9% QoQ. While IES (-5.9% QoQ) and SAP (-2.6% QoQ) businesses again pressurised revenue, USD revenue from Product Engineering and Products & Platforms (P&P;) businesses grew by a healthy 5.1% QoQ and 33.7% QoQ, respectively. Notably, P&P; business is lumpy in nature. Beating our estimate by 222bps, EBITDA margin expanded by a robust 147bps QoQ to 13.6% despite wage hike impact of 220bps owing to INR depreciation...

21 August 2018 After several years of coping with integration issues and legacy pressures in its IT services business, KPIT announced that it would demerge its Engineering business and merge the IT services bit with Birlasoft. KPITs Engineering business has been its strongpoint, exhibiting 16% revenue CAGR over the last five years. Birlasoft too has been under pressure because of issues in its top client and has witnessed a decline of ~4% in revenue over the last three years. However, we note that during this period, positioning, prowess and performance in the Engineering business has been strong; and a majority of the issues can be attributed to the companys presence and efforts in the IT services business. KPIT Technologies On completion of the transaction, we reckon the Engineering Services side should grow at a 20% CAGR.

KPIT reported a better-than-expected margin performance in Q1FY19 while revenues were below our estimates US$ revenues grew marginally by 0.2% QoQ to $150.5 million, below our 1.8% growth and $152.9 million estimate Revenues in rupees grew 4.9% QoQ to | 1013.8 crore, below our estimate of 6% growth and | 1024.8 crore EBITDA margins expanded ~70 bps QoQ to 12.1%, above our 50 bps expansion and 11.9% estimate. Better-than-expected margin...

Revenue above Industry Avg. coupled with margin improvement KPIT reported muted Q1FY19 with a USD revenue growth of 0.2% QoQ supported by services business. EBIT margin improved 74bps QoQ to 9.4% (DCMe: 9.5%) largely on back of operational efficiencies and INR depreciation. The stock is currently trading at inexpensive valuations 13.6x/11.3x FY20/FY21 earnings estimates. We believe revenue growth above industry avg., coupled with margin improvement will lead to absolute upside in near to medium term; upgrade the stock to ACCUMULATE...

KPIT Technologies (KPIT) has delivered a subdued revenue performance in 1QFY19, which grew 0.2% QoQ in USD terms to US$150.5mn (0.8% below our estimate). In CC terms, core service revenue rose by 3.5% QoQ. USD revenue from Product Engineering business grew by a healthy 5.5% QoQ, while IES revenue rose by a decent 2.7% QoQ. However, revenue from Products & Platforms declined by a steep 39.6% QoQ. It should be noted that this business is lumpy in nature. While Digital Transformation saw 2.2% QoQ growth, SAP continued to face growth headwinds with the business declining by 3.5% QoQ, marking the third successive quarter of decline. EBITDA margin expanded by 75bps (95bps ahead of our estimate) owing to INR...

ICICI Securities Ltd | Retail Equity Research KPIT reported a better than expected Q4FY18 on all fronts US$ revenues grew 6.4% QoQ to $150.2 million, above our 1% growth and $142.6 million estimate Revenues in rupees grew 5.9% QoQ to | 966.4 crore, above our estimate of 0.5% growth and | 917.5 crore EBITDA margins expanded ~50 bps QoQ to 11.4%, above our 30 bps expansion and 11.1% estimate. Margin expansion was on the...