New York: 03:53 || London: 06:53 || Mumbai: 12:23 || Singapore: 14:53

Recommendations India

KPIT Cummins Infosystems Q4FY14 results update

April 30, 2014, Wednesday, 06:33 GMT | 02:33 EST | 11:03 IST | 13:33 SGT
Contributed by Nirmal Bang

KPIT reported Q4FY14 numbers in line with our expectations. USD revenues grew by 3.6% QoQ on the back of good growth across all SBU’s except for the top client which de-grew by 10% QoQ. Revenues grew also because of ramping up in 3 new contracts it bagged in the previous quarter. Management has made organizational re-structuring wherein the company has adopted an industry verticalisation and go to market approach to fuel growth in the coming years. At CMP, the stock is trading at 10.4x/8.7x its FY15E/FY16E expected earnings. We continue to be positive about the stock and recommend BUY for long term.

- USD Revenues for Q4FY14 grew by 3.6% QoQ at USD 113.6 mn. APAC region saw 30% QoQ growth due to ramp up in new contracts. Company expects further ramp ups from these 3 clients in H1FY15. SAP SBU which was flattish in the past couple of quarters also saw QoQ growth of 4.4%.

- EBIDTA margins grew by 46 bps QoQ to 15.7% on the back of good revenue growth though there was some forex impact.

- Company incurred Rs.23.9 crore forex loss in the current quarter against a loss of Rs. 3.1 crore in the preceding quarter.

- PAT for the quarter grew by 9% QoQ to Rs.61.3 crore. This includes write back of 9.8 crore with respect to 20% stake in Japanese firm.

Other Highlights:

- Top Client Cummins has de-grown by 10% QoQ and now contributes 15.5% to revenues. Top 4 and 9 customers have grown by 16.6% and 5.6% QoQ respectively.

- Company has added 3 clients during the quarter taking the total active clients to 198.

FY14 details

- USD revenues grew by 8.2% and EBIDTA margins fell by 80 bps YoY.

- Adj PAT has grown by 17% YoY to Rs.269.4 crore.


- Management has given a guidance of 12-14 % growth in revenues for FY15 on the back of good demand seen and recovery in the SAP market.

- INR PAT is expected to be in the range of Rs.294 crore to 300.5 crore for FY15.