KPIT Technologies - Business Standard

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3 Νοε 2013 (πριν από 4 χρόνια και 1 μήνα)

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Please refer to important disclosures at the end of this report

1


(` cr)
2QFY14
1QFY14
% chg (qoq)

2QFY13

% chg (yoy)

Net revenue
703
613
14.6

567

23.9

EBITDA
109
97
11.9

95

15.1

EBITDA margin (%)
15.5
15.9
(37)bp

16.7

(118)bp

PAT
67
60
11.0

41

64.2

Source: Company, Angel Research
For 2QFY2014, KPIT Technologies (KPIT) reported broadly in-line numbers on the
revenue front but disappointed on the operating as well as bottom-line fronts. The
company closed two large deals in excess of US$10mn during the quarter and
has created a robust pipeline of larger deals. The company has maintained its
guided revenue band of US$465mn-475mn, implying a growth of 13.3-15.7%
yoy. This requires a revenue CQGR of 6.5-8.8% for the remaining two quarters of
FY2014, which we believe is stretched keeping in notice that 3Q is cyclically a
weak quarter for IT companies. We maintain our Accumulate rating on the stock.
Quarterly highlights: For 2QFY2014, KPIT reported revenues of US$112mn, up
3.1% qoq and 8.5% yoy. In INR terms, the revenue came in at `703cr, up 14.6%
qoq. KPIT’s EBITDA margin declined by 37bp qoq to 15.5% which is
disappointing considering the strong gains incurred on account of the INR’s
depreciation against the USD, during the quarter. Margins were impacted due to
higher investments in SG&A coupled with lower utilization and one-time
provisions. The PAT came in at `67cr, up 11% qoq.
Outlook and valuation: KPIT has reiterated its positive tone and expects growth to
be back ended and pick up in 2HFY2014. The company is nearing to the closure
of US$25mn deal and expects ramp-ups to start from next quarter. For FY2014,
the company has maintained its guided revenue band of US$465mn-475mn,
implying a growth of 13.3-15.7% yoy. This requires a revenue CQGR of 6.5-8.8%
for the remaining two quarters of FY2014, which we believe is stretched keeping
in notice that 3Q is cyclically a weak quarter for IT companies and the current
environment is not conducive for such kind of a growth. We expect USD revenues
to grow by 11.0% in FY2014. Over FY2013-15E, we expect the company to post
a USD and INR revenue CAGR of 11% and 18%, respectively. On the operational
front, after two quarters of successive declines in EBITDA margin, we expect
margins to improve going ahead. The PAT is expected to post a CAGR of 23.7%
over FY2013-15E. We value the company at 10x FY2015E EPS, which gives us a
target price of `155. We maintain our Accumulate rating on the stock.
Key financials (Consolidated)
Y/E March (` cr)
FY2011
FY2012
FY2013

FY2014E

FY2015E

Net sales
1,007
1,500
2,239

2,769

3,134

% chg
37.6
49.0
49.2

23.7

13.2

Net profit
95
135
200

262

306

% chg
10.6
42.5
48.2

31.0

16.7

EBITDA margin (%)
15.1
14.5
16.3

16.0

16.1

EPS (`)
5.7
8.0
10.6

13.4

15.7

P/E (x)
25.3
17.9
13.6

10.7

9.1

P/BV (x)
1.9
3.6
2.4

2.0

1.6

RoE (%)
15.7
19.0
19.0

20.0

19.0

RoCE (%)
15.5
17.3
20.2

21.3

20.8

EV/Sales (x)
2.4
1.8
1.2

0.9

0.7

EV/EBITDA (x)
16.1
12.1
7.4

5.5

4.3

Source: Company, Angel Research; Note: CMP as of October 23, 2013

A
CCUMULATE

CMP `144
Target Price `155
Investment Period 12 Months


Stock Info
Sector
Net debt (
`
cr) 2
Bloomberg Code
KPIT@IN
Shareholding Pattern (%)
Promoters 22.9
MF / Banks / Indian Fls 11.1
FII / NRIs / OCBs 36.4
Indian Public / Others 29.6
Abs. (%) 3m 1yr 3yr
Sensex 2.3 11.0 3.0
KPIT Tech.7.4 19.5 74.4
20,768
6,178
KPIT.BO
160/92
106,195
Face Value (
`
)
IT
Avg. Daily Volume
Market Cap (
`
cr)
Beta
52 Week High / Low
2,771
0.6
2
BSE Sensex
Nifty
Reuters Code











Ankita Somani
022-3935 7800 Ext: 6819
ankita.somani@angelbroking.com
KPIT Technologies
Performance Highlights
2QFY2014 Result Update
|
I
T
October 24, 2013



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

2
Exhibit 1: 2QFY2014 performance (Consolidated)
Y/E March (` cr)
2QFY14

1QFY14
% chg (qoq)

2QFY13

% chg (yoy)

1HFY14
1HFY13

% chg (yoy)

Net revenue
703

613
14.6

567

23.9

1,316
1,105

19.0

Cost of revenue
467

420
11.1

370

26.0

886
721

23.0

Gross profit
236

193
22.2

197

20.0

430
385

11.7

SGA expenses
127

96
32.7

102

24.4

223
209

7.0

EBITDA
109

97
11.9

95

15.1

206
176

17.3

Depreciation
15

12
22.0

11

29.7

27
23

18.5

EBIT
94

85
10.5

83

13.1

179
153

17.1

Interest expense
7

6
17.9

3

114.3

14
7

95.1

Other income
2

6

(19)


8
(16)


Exceptional item
-

-

5


-
3


PBT
89

85
5.0

66

34.7

174
133

31.0

Income tax
22

25
(9.6)

19

15.8

47
38

24.2

PAT
67

60
11.0

47

42.5

127
95

33.7

Minority interest
-

-

1


-
2

(100.0)

Share in profit of ass.
-

-

1


-
(1)


Adj. PAT
67

60
11.0

41

64.2

127
89

42.1

EPS
3.4

3.0
10.9

2.5

34.8

6.4
5.3

20.7

EBITDA margin (%)
15.5

15.9
(37)bp

16.7

(118)bp

15.7
15.9

(24)bp

EBIT margin (%)
13.4

13.9
(50)bp

14.6

(127)bp

13.6
13.8

(23)bp

PAT margin (%)
9.5

9.7
(25)bp

7.4

205bp

9.6
8.2

139bp


Source: Company, Angel Research

Exhibit 2: Actual vs Angel estimates
(` cr)
Estimate
Actual

Var. (% )

Net revenue
716
703

(1.9)

EBITDA margin (%)
17.7
15.5

(220)bp

PAT
70
67

(4.9)


Source: Company, Angel Research
Subdued performance
For 2QFY2014, KPIT reported revenues of US$112mn, up 3.1% qoq and 8.5%
yoy. Onsite revenues grew by 4.1% qoq to US$61.3mn while offshore revenues
grew by 2.1% qoq to US$50.9mn during the quarter. In INR terms, the revenue
came in at `703cr, up 14.6% qoq.



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

3
Exhibit 3: Trend in revenue growth (qoq)
Source: Company, Angel Research

KPIT’s revenue performance came on the back of modest growth across all of its
major strategic business units (SBUs).
IES SBU posts decent growth: The integrated enterprise solutions (IES) SBU
(contributed 39.5% to revenue) reported a revenue growth of 2.9% qoq to
US$44.3mn. The company continues to see traction for its solution – Ontrack - the
Vehicle Tracking Systems (VTS), Oracle Fusion Middleware and ERP testing with
new deal wins in these respective areas. The Management indicated that in this
SBU, a key growth factor over the next few months would be the end of Oracle’s
support to 11i version by May 2014 which will require the clients to upgrade to
R12 version by the start of the next fiscal year.
Auto and engineering SBU emerges as primary growth driver: The auto and
engineering SBU (contributed 24.2% to revenue) reported a 5.7% qoq growth in
revenue to US$27.2mn. The Management indicated that during the quarter the
company witnessed good traction in powertrain, body electronics and instrument
clusters. Also, the company is seeing increased activity in intelligent transportation
systems and working on important opportunities to provide full range of telematics
solutions to key commercial vehicle makers.
SAP SBU muted: The SAP SBU (contributed 25.4% to revenues) registered just a
0.6% qoq growth in its revenues to US$28.5mn. SAP’s poor performance
continued to be a matter of concern but the Management indicated that it has
taken concrete steps over the last two quarters to change the model, focus more
on large deals, focus more on AMS deals, embrace the Cloud, and also diversify
outside of North America. The company expects its SAP business to grow going
forward as its pipeline remains healthy with growing interest in Europe, besides the
growth markets of US & APAC. KPIT expects acceleration in SAP business towards
3Q and 4QFY2014. KPIT indicated that SAP SBU’s margins are likely to recover to
high single digits towards the end of FY2014. The Management indicated that
good momentum is seen across practices such as mobility, analytics, customer
relationship management (CRM) and cloud.
BTU posts healthy growth: The business transformation unit (BTU) SBU (contributed
11.0% to revenue) reported a revenue growth of 4.7% qoq to US$12.3mn. The
103.4
103.5
105.5
108.8
112.2
5.5
0.0
2.0
3.1
3.1
0
1
2
3
4
5
6
98
100
102
104
106
108
110
112
114
2QFY13 3QFY13 4QFY13 1QFY14 2QFY14
(%)
(US$ mn)
Revenue (US$ mn)
qoq growth (%)



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

4
Management indicated that during the quarter BTU had been working towards
delivering high-end consulting services. IT Service Management (ITSM) is one of
the key focus areas for large enterprises and the company is building ITSM as a
niche consulting service offering.
Exhibit 4: Revenue growth (SBU wise)
SBU
% of revenue
% growth (qoq)

% growth (yoy)

Integrated enterprise solutions
39.5

2.9

24.8

Auto and engineering
24.2

5.7

7.7

SAP
25.4

0.6

(11.2)

Business transformation unit 11.0

4.7

15.7


Source: Company, Angel Research

The company’s anchor vertical, automotive and transportation (contributed 36.1%
to revenue) registered a revenue growth of 1.6% qoq. The company is witnessing
modest traction in this vertical as automobile companies try to improve efficiency,
safety and comfort and adhere to regulatory standards. Also, increased demand is
being witnessed from auto majors. To remain competitive, auto majors are trying
to maintain/reduce costs and still bring in high-end technology features in their
vehicles. Revenue from the manufacturing industry vertical grew by 0.2% qoq while
revenues from energy and utilities declined by 3.7% qoq. In the manufacturing
industry vertical, the company is witnessing demand traction from thrust in
operational efficiency through productivity improvement, quality management and
cost reduction by automation of human tasks.
Exhibit 5: Revenue growth (Vertical wise)
Service verticals
% of revenue
% growth (qoq)

% growth (yoy)

Automotive and transportation
36.1

1.6

(5.1)

Manufacturing
39.7

0.2

24.7

Energy and utilities
13.6

(3.7)

(9.4)

Others
10.7

(1.1)

(19.2)


Source: Company, Angel Research
Geography wise, revenue from the US declined by 1.1% qoq which according to
the Management, can be considered as one-off as the deal pipeline from the US
remains strong. Revenue from Europe grew by 8.2% qoq.
Exhibit 6: Revenue growth (Geography wise)
Geography
% of revenue
% growth (qoq)

% growth (yoy)

U.S.
71.9

(1.1)

2.1

Europe
13.8

8.2

23.6

Rest of the World
14.4

24.4

35.0


Source: Company, Angel Research

Hiring and utilization

During the quarter, KPIT’s total employee base witnessed a net addition of 360
employees (highest in last six quarters), taking its total employee base to 8,816.
Onsite as well as offshore utilization declined by 178bp and 51bp qoq to 92.4%
and 72.9%, respectively during the quarter, due to strong employee addition.



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

5
Exhibit 7: Employee addition
Particulars
2QFY13

3QFY13

4QFY13
1QFY14

2QFY14

Net addition





Development
229

169

32
123

351

Sales and support
9

6

3
12

9

Total
238

175

35
135

360

Total employees





Development
7,447

7,616

7,648
7,771

8,122

Sales and support
664

670

673
685

694

Total
8,111

8,286

8,321
8,456

8,816


Source: Company, Angel Research

Exhibit 8: Trend in utilization
Source: Company, Angel Research

Margins decline
On the operational front, KPIT’s EBITDA and EBIT margins declined by 37bp and
50bp qoq to 15.5% and 13.4% respectively, which is disappointing, given the
strong gains incurred from the INR’s depreciation against the USD, during the
quarter. The margins factored the following – 1) INR depreciation of ~11% against
the USD aiding by 250bp, 2) one-time provision of `12cr impacting by ~165bp;
3) additional expense due to an industry event and management development
program of `8cr impacting by ~120bp; and 4) additional employee intake costs
of `3.5cr impacting by ~50bp. The one-time provision and additional expenses
due to the event and management program were not factored in our numbers.
94.5
92.8
94.3
94.2
92.4
74.7
72.9
74.1
73.4
72.9
60
65
70
75
80
85
90
95
100

2QFY13 3QFY13 4QFY13 1QFY14 2QFY14
(%)
Onsite utilisation
Offshore utilisation



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

6
Exhibit 9: Margin profile
Source: Company, Angel Research
Client pyramid
KPIT added three new clients during 2QFY2014. The total active client base of the
company stands at 192 as against 189 in 1QFY2014. The USD revenue from
Cummins increased by 1.6% qoq to US$18.5mn. KPIT’s revenue from the top-10
clients excluding Cummins grew by 0.6% qoq. The Management cited robust
outlook in these accounts.
Exhibit 10: Client metrics
(% of revenue)
2QFY13

3QFY13
4QFY13
1QFY14

2QFY14

Top client-Cummins
19.7

19.1
16.6
16.8

1.5

Top-10 client billing 43.7

45.2 44.0 47.3

46.3

No. of customers added
4

2
5
6

3

No. of active customers 176

178 183 189

192

Customers with run rate >US$1mn

69

72
78
78

78


Source: Company, Angel Research

Outlook and valuation
KPIT has reiterated its positive tone and expects growth to be back ended and pick
up in 2HFY2014. The company is nearing closure of US$25mn deal and expects
ramp-ups to start from the next quarter. The Management expects IES and Auto
Engineering SBUs to drive incremental growth for the full year. Growth in SAP SBU
is expected to pick up from 4QFY2014.
KPIT’s USD revenue for FY2013 grew by 33%, exceeding the Management’s
guidance of 32% and much ahead of the industry’s FY2013 growth rate.
For FY2014, the company has maintained its guided revenue band of
US$465mn-475mn, implying a growth of 13.3-15.7% yoy. This requires revenue
CQGR of 6.5-8.8% in FY2014 for the remaining two quarters, which we believe is
stretched keeping in notice that 3Q is a cyclically weak quarter for IT companies
and the current environment is not conducive for such kind of growth. We expect
USD revenues to grow by 11.0% in FY2014. Over FY2013-15E, we expect the
company to post a USD and INR revenue CAGR of 11% and 18%, respectively.
34.7
34.2
34.6
31.5
33.6
16.7
15.7
17.7
15.9
15.5
14.6
13.6
15.6
13.9
13.4
5
15
25
35
45
2QFY13 3QFY13 4QFY13 1QFY14 2QFY14
(%)
Gross margin
EBITDA margin
EBIT margin



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

7
On the operational front, after two quarters of successive declines in EBITDA
margin to 15.5% in 2QFY2014, we expect margins to improve going ahead. The
company’s front-end investments, increased SG&A spends, one-off provisions and
lower utilization has led to a decline in overall margins. Going forward, we
believe, factors such as: strong revenue growth, increase in utilization level,
offshore effort shift and increase in margins of SAP SBU (which currently are at low
single digit at EBIT level) would be key for overall margin expansion. On the
EBITDA margin front, we expect margin to be at 16.0% and 16.1% for FY2014
and FY2015, respectively. The PAT is expected to post a CAGR of 23.7% over
FY2013-15E. The stock is currently trading at 10.7x FY2014E and 9.1x FY2015E
EPS. We value the company at 10x FY2015E EPS, which gives us a target price of
`155. We maintain our Accumulate rating on the stock.
Exhibit 11: Key assumptions

FY2014

FY2015

Revenue growth-USD terms (%)
11.0

11.0

USD-INR rate
60.7

62.0

Revenue growth-INR terms (%)
23.7

13.2

EBITDA margin (%)
16.0

16.1

Tax rate (%)
27.0

28.0

EPS growth (%)
26.7

17.6


Source: Company, Angel Research

Exhibit 12: One-year forward PE
Source: Company, Angel Research

0
20
40
60
80
100
120
140
160
180

Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
(`)
Price
14x
11x
8x
5x
2x



KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

8
Exhibit 13: Recommendation summary
Company
Reco.
CMP
Tgt. price

Upside

FY2015E

FY2015E

FY2012-15E
FY2015E

FY2015E



(`)
(`)

(%)

EBITDA (%)

P/E (x)

EPS CAGR (%)
EV/Sales (x)

RoE (%)

HCL Tech
Accumulate
1,105
1220

10.4

23.7

12.7

34.2
1.8

25.5

Hexaware
Neutral
132
-

-

21.5

9.5

15.9
1.3

24.5

Infosys
Neutral
3,324
-

-

27.2

15.4

14.1
2.7

20.9

Infotech Entp.
Accumulate
222
240

7.9

18.2

8.8

20.5
0.6

15.3

KPIT Tech.
Accumulate
144
155

7.9

16.1

9.1

25.1
0.7

19.0

MindTree
Accumulate
1,377
1500

8.9

20.8

10.7

33.6
1.2

23.2

Mphasis
Accumulate
441
464

5.3

18.3

9.5

7.2
0.7

14.7

NIIT^
Neutral
20
-

-

7.1

5.3

(17.4)
0.0

9.0

Persistent Neutral 759 -

-

25.8

10.5

26.7 1.1

19.1

TCS
Buy
2,060
2,500

21.3

31.1

17.8

28.7
4.0

31.5

Tech Mahindra Neutral 1,550 -

-

21.6

12.7

16.0 0.6

23.8

Wipro
Buy
492
567

15.2

23.5

13.5

17.2
1.9

21.6


Source: Company, Angel Research; Note: ^Valued on SOTP basis

Company Background
KPIT Technologies (KPIT), a mid-tier Indian IT company, specializes in the
manufacturing segment, with a focus on automotive and industrial solutions and
services. The company focuses on three areas of solutions – enterprise services,
auto & engineering and SAP. KPIT has been growing strongly, both organically
and inorganically. The company has successfully acquired eight companies in nine
years, which scaled up its revenue many fold.













KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

9
Profit and Loss statement (Consolidated)
Y/E March (` cr)
FY2011

FY2012

FY2013
FY2014E

FY2015E

Net sales
1,007

1,500

2,239
2,769

3,134

Cost of revenue
644

993

1,464
1,852

2,113

% of net sales
64.0

66.2

65.4
66.9

67.4

Gross profit
363

507

775
917

1,022

% of net sales
36.0

33.8

34.6
33.1

32.6

S&M expenses
76

112

154
173

188

% of net sales
7.6

7.4

6.9
6.2

6.0

G&A expenses
134

177

256
301

329

% of net sales
13.3

11.8

11.4
10.9

10.5

EBITDA
152

218

365
444

504

% of net sales
15.1

14.5

16.3
16.0

16.1

Depreciation
41

44

47
58

66

EBIT
111

174

318
386

439

Interest expense, net
3

8

15
23

20

Other income, net
3

13

(17)
(4)

7

Exceptional item
-

10

(1)
-

-

Profit before tax
110

189

285
359

425

Provision for tax 15

44

77 97

119

% of PBT
14.0

23.1

26.9
27.0

28.0

PAT 95

145

208 262

306

Minority interest
-

3

9
-

-

Share in profit of ass. -

3

(1) -

-

Adj. PAT
95

135

200
262

306

EPS (`) 5.7

8.0

10.6 13.4

15.7



















KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

10
Balance sheet (Consolidated)
Y/E March (` cr)
FY2011

FY2012

FY2013E
FY2014E

FY2015E

Liabilities





Share capital
18

36

36
36

36

Application money
0

0

0
0

0

ESOP outstanding
-

-

-
-

-

Preferential shares
-

-

-
-

-

Reserves and surplus
585

677

1,021
1,276

1,575

Share premium
-

-

-
-

-

Total shareholders’ funds
603

713

1,056
1,312

1,611

Secured loans
12

82

146
146

146

Unsecured loans
82

140

175
155

155

Total debt
93

222

321
301

301

Minority interest
1

33

27
27

27

Deferred tax liability, net
5

(3)

-
-

-

Other liabilities
11

26

160
160

160

Long term provisions
5

10

14
14

14

Total liabilities 718

1,001

1,579 1,814

2,114

Assets

Gross block - fixed assets 327

399

474 574

674

Accumulated depreciation
169

213

260
318

383

Net block 158

185

214 256

290

Capital work-in-progress
3

3

193
193

193

Goodwill 130

362

442 442

442

Investments
-

22

29
18

15

Loans and advances 76

62

62 62

62

Current assets

Sundry debtors 229

438

467 569

644

Cash and bank balance
208

147

192
425

706

Loans and advances 33

60

204 153

130

Other current assets
73

53

142
142

142

Less:- Current liabilities





Sundry creditors
94

176

190
233

266

Other liabilities 76

106

102 122

142

Provisions
20

49

74
91

103

Net current assets 352

367

639 843

1,111

Total assets
718

1,001

1,579
1,814

2,114












KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

11
Cash flow statement (Consolidated)
Y/E March (` cr)
FY2011

FY2012
FY2013
FY2014E

FY2015E

Pretax profit from operations
108

169
303
363

419

Depreciation
41

44
47
58

66

Pre tax cash from operations
149

214
350
421

484

Other income/prior period ad
3

13
(17)
(4)

7

Net cash from operations
151

226
333
417

491

Tax
(15)

(44)
(77)
(97)

(119)

Cash profits
136

183
256
320

372

(Inc)/dec in



Current assets
(128)

(217)
(262)
(52)

(51)

Current liabilities
60

141
34
81

65

Net trade working capital
(68)

(75)
(227)
29

13

Cash flow from operating activities
68

107
29
349

386

(Inc)/dec in fixed assets
(76)

(72)
(75)
(100)

(100)

(Inc)/dec in investments
75

(22)
(7)
11

3

Inc/(dec) in deferred tax liability
0

(8)
3
-

-

(Inc)/dec in intangibles
(35)

(232)
(80)
-

-

Inc/(dec) in minority interest
1

32
(6)
-

-

Inc/(dec) in other non-current assets

(34)

34
(52)
-

-

Cash flow from investing activities

(68)

(268)
(217)
(89)

(97)

Inc/(dec) in debt (18)

129 99 (20)

-

Inc/(dec) in equity/premium
128

(22)
142
(0)

-

Dividends (7)

(7) (7) (7)

(7)

Cash flow from financing activities

104

100
234
(27)

(7)

Cash generated/(utilized) 103

(61) 45 233

281

Cash at start of the year
105

208
147
192

425

Cash at end of the year 208

147 192 425

706


















KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

12
Key ratios
Y/E March
FY2011

FY2012
FY2013
FY2014E

FY2015E

Valuation ratio (x)





P/E (on FDEPS)
25.3

17.9
13.6
10.7

9.1

P/CEPS
8.6

13.6
10.1
8.0

6.9

P/BVPS
1.9

3.6
2.4
2.0

1.6

Dividend yield (%)
0.6

0.6
0.6
0.6

0.6

EV/Sales
2.4

1.8
1.2
0.9

0.7

EV/EBITDA
16.1

12.1
7.4
5.5

4.3

EV/Total assets
3.4

2.6
1.7
1.3

1.0

Per share data (`)



EPS
5.7

8.0
10.6
13.4

15.7

Cash EPS
16.7

10.6
14.2
17.9

20.8

Dividend
0.9

0.9
0.9
0.9

0.9

Book value
73.9

39.8
59.0
73.3

90.0

Dupont analysis



Tax retention ratio (PAT/PBT)
0.9

0.7
0.7
0.7

0.7

Cost of debt (PBT/EBIT)
1.0

1.1
0.9
0.9

1.0

EBIT margin (EBIT/Sales)
0.1

0.1
0.1
0.1

0.1

Asset turnover ratio (Sales/Assets)

1.4

1.5
1.4
1.5

1.5

Leverage ratio (Assets/Equity)
1.2

1.4
1.5
1.4

1.3

Operating ROE
15.7

19.0
19.0
20.0

19.0

Return ratios (%)



RoCE (pre-tax)
15.5

17.3
20.2
21.3

20.8

Angel RoIC
29.2

35.3
33.7
40.8

45.4

RoE
15.7

19.0
19.0
20.0

19.0

Turnover ratios (x)



Asset turnover (fixed assets)
1.6

1.7
1.7
1.6

1.6

Receivables days
67

81
74
75

75

Payable days
45

50
46
46

46

















KPIT

Technologies
|
2QFY2014 Result Update
October 24, 2013

13



Research Team Tel: 022 - 3935 7800 E-mail: research@angelbroking.com Website: www.angelbroking.com

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Disclosure of Interest Statement KPIT Technologies
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors