Birlasoft Ltd. share price target

Geographies: Europe and ROW up 3.9% and 1.6% qoq; America declined 0.3% qoq. Services: Products & Platforms grew 35.3% qoq (seasonality impact), Engg Services grew by 9.8% qoq. SAP declined 12.5% qoq....

Within SBUs, growth was led by Product Engineering Services supported by strong growth in Automotive vertical; Digital solutions was flat for the quarter; product & platform continued to be lumpy on ITS cyclicality, however it is expected to improve ahead. EBITDA margin has shown a consistent improvement and came at 15.7%, +120bp qoq supported by 1) +55bp impact on INR depreciation, 2) offshore-shift, and 3) productivity improvement as blended utilization increased to 73.6%, +100bp qoq. Margin is expected to remain at current level based on continued fresher addition, increase in offshore utilization and growth-led operational lever. PAT stood at Rs885mn,...

We are pleased to invite you to KPIT Technologies 4QFY16 post results conference call with the senior management. The conference call will be held on Thursday, 28th April, 2016 at 4:00 PM (IST). The call will be initiated with a brief management discussion on the earnings performance followed by an interactive Question & Answer session. The management will be represented by: Mr. Ravi Pandit, Co-founder, Chairman & Group CEO Mr. Kishor Patil, Co-founder, CEO & MD Mr. Sachin Tikekar, Board Member President- Strategic Relationships & Business Transformation Mr. Anil Patwardhan, Sr. VP & Head Corporate Finance & Governance...

be a tight balance ahead between further pyramid rationalisation (higher fresher hiring) and improving offshore utilisation (70%). Continuous decline in IES business remains a concern so does decline in the top5 clients. We remain sceptical of KPIT being able to...

KPIT's Q3FY16 performance was disappointing on revenue front. Revenue at US$123.3mn was down 1.0% QoQ, -2.5% YoY was below our estimates. Revenue miss was due to higher furloughs in Automotive and decline in couple of customers in Energy vertical.

KPIT Technologies is leading product engineering and IT consulting partner with FY15 revenues of USD 489mn. In 3QFY16 revenue share amongst verticals: automotive & transportation (35.97%), manufacturing (36.61%) & Energy & Utilities (20.17%) and others (7.26%). It operates in five main business segments: Integrated Enterprise Solutions (34.04%), Product Engineering Services (26.35%), Product and Platform (3.81%), SAP (25.9%) and Enterprise Solutions (9.9%). KPIT derives 14.06% of its revenue from Cummins, which is the largest client. The company has 10,559 employees spread across more than 10 countries to cater services to...

Muted revenue on lower IES & product business KPIT's revenue fell short of estimates impacted by decline in IES and product business while operating performance was better on pyramid rationalization. While automotive vertical is expected to rebound, energy division (~10% of revenue) is expected to be muted ahead. Management indicated to lower growth for the next three quarters and acceleration from 2HFY17E even as it expects margins to be sustainable at current levels. We expect US$ revenue/EPS to grow at 7%/12% over FY15-18E with EBITDA% factored at 13.2%/12.9%/13.9% for FY16E/17E/18E, respectively; maintain HOLD...

KPIT reported a subdued 3QFY16, with revenue down 1% QoQ (US$ 123.3mn vs. our estimate of US$ 125.9mn) owing to furloughs and issues with two energy clients. A positive sign was the 57bps QoQ EBITDA margin expansion, led by INR depreciation and the employee pyramid.

KPIT, a key IT service provider in manufacturing domain particularly in Automotive is all geared up for next leg of growth. Company is one of a kind in delivering auto electronic services, semiconductor solutions while other service offerings include Enterprise IT. Improving demand environment in Automotive & Manufacturing coupled with traction in SAP provides ample growth opportunities.