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ICICI Securities Ltd | Retail Equity Research KPIT reported a better-than-expected Q2FY18 performance on all fronts. The EBITDA margin was sharply ahead of our expectations despite the impact of wage hike US$ revenues grew 5.5% QoQ to $141.8 million above our 2.5%...

a USD2m license sale from previous quarter. 13.7% YoY growth in 1HFY18 (~10% organic) puts KPIT on a strong footing after flat revenue in FY17. Margin improvement despite wage hikes: EBITDA margin at 9.9% was up 80bp QoQ, and above our estimate of 8.5%. Expansion was seen despite a wage hike and comes as a positive, especially after multiple quarters of disappointment. The 180-200bp negative impact of salaries was more than offset by [1] strong revenue growth, [2] absorption of freshers, [3] higher utilization (+140bp on offshore and +300bp on onsite), and [4] operational...

We've factored in USD revenue growth of 10.5/8.4% for FY18/19E, implying 1.1/2.6% CQGR for the same period. Expect EBITDA% to decline in 2Q, and subsequently improve (factored 9.8/11.6% for FY18/19E). Maintain NEUTRAL with a TP of Rs 125, 9x FY19E. KPIT reported steady revenue growth (3.5% CC) and in-line operating performance (-100bps QoQ to 9.1% EBITDA). Revenue of USD 134mn, 4.8% QoQ was supported by USD 2mn non-recurring license revenue (+1.6% revenue impact). IES, Product Engineering Services and Product & Platform led growth among SBUs.

ICICI Securities Ltd | Retail Equity Research KPIT reported a better than expected Q1FY18 performance while EBITDA margin was sharply ahead of our expectation as it has deferred a wage hike to the next quarter US$ revenues grew 4.8% QoQ to $134.4 million above our 1.5% growth and $130.2 million estimate Revenues in rupees grew 1.4% QoQ to | 870.4 crore and were above our estimate of 2.2% decline and | 839.4 crore...

Healthy Growth in Revenue, But Margin Pressure Impedes Earnings KPIT Technologies (KPIT) has reported a healthy 4.8% QoQ growth in USD revenue to US$134.4mn in 1QFY18. However, adjusting for one-time technology licence revenue of US$2mn, adjusted revenue rose by 3.2% QoQ (1.9% QoQ in CC terms). EBITDA margin declined by 101bps QoQ, which was largely in-line with our estimate. INR appreciation was the key margin headwind in the quarter. Looking forward to 2QFY18E, KPIT will award wage hikes, which will have a 225-250bps impact on margins. The company is looking to drive utilisation, productivity and cost efficiency to offset these headwinds....

KPIT posted flat margins and steady revenue growth in 4QFY17 (1.2% organic). An improvement in business mix and increase in offshore utilisation helped offset INR appreciation and MicroFuzzy integration. Growth was led by the Product Engg Services SBU (5.5% QoQ) and Products & Platforms (11.4% QoQ). Unsurprisingly, IES (-2.3% QoQ) and SAP (1.4% QoQ) SBUs struggled.

In rupees terms, revenues grew 3.3% QoQ to | 858.4 crore, above our estimate of 2% growth to | 846.9 crore EBITDA margins declined 10 bps QoQ to 10.1% below our estimate...

KPIT's CC revenue growth guidance of 6-8% for FY18E is disappointing, in our view. Assuming stable currency rates in FY18E, the guidance implies revenue CQGR of just 1-1.5% over 4QFY174QFY18E, which is at odds with management commentary of good visibility for the fiscal. Given the challenging business scenario, with challenges being witnessed in MFG vertical, INR appreciation and disruptive trends like SMAC, which are impacting ERP (>50% of revenue), we...

KPIT Technologies is leading product engineering and IT consulting partner with FY16 revenue of INR 32.2bn. In 3QFY17 revenue share amongst verticals: automotive & transportation (39.29%), manufacturing (37.2%) & Energy & Utilities (14.07%) and others (9.44%). It operates in five main business segments: Integrated Enterprise Solutions (29.55%), Product Engineering Services (31.8%), Product and Platform (3.89%), SAP (23.4%) and Digital Transformation (11.37%). KPIT derives 12.64% of its revenue from Cummins, which is the largest client. The company has 11,881 employees spread across more than 10 countries to cater services to...

ICICI Securities Ltd | Retail Equity Research KPIT reported weak Q3FY17 earnings in margin terms but revenue was above our estimates with exceptional item boosting PAT US$ revenues declined 0.4% QoQ to $122.9 million and was in line with our $122.2 million estimate In rupees terms, revenues declined 0.04% QoQ to | 830.7 crore and was above our estimate of | 823.4 crore with rupee realised at 67.6 EBITDA margins declined 80 bps QoQ to 10.2%, and was below our...