KPIT Technologies Warns Of Slower Revenue Traction in FY17
KPIT Technologies warned of slower revenue traction in FY17 in a conference call on Monday, citing strain on its manufacturing clients. Ravi Pandit, co-founder, chairman & group CEO however, assured that there had been no loss of business from existing customers.
Pandit said the company's manufacturing clients were under pressure following cuts in their IT budgets. Revenue from ERP (Enterprise Resource Planning) implementation - the company's main IT revenue contributor - is declining in developed markets, he added. The company's key ERP client Oracle is focusing on cloud while its other important client SAP is shifting to Hana.
The company ruled out any cut in its capital expenditure plan for FY17, which would mainly be used to set up a new facility. When asked about margins, Pandit said salary hikes for the year have been moderate and the company plans to lower existing cost structures.
KPIT Technologies had last week warned of a likely 4 percent drop in revenues for the April-June 2016 quarter with a consequent drop in profitability, as traditional revenues from its ERP implementation segment got affected more than anticipated.
The stock had corrected 14.7 percent on the BSE on June 30, following the earnings warning.
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