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Dolat Capital Report
KPIT Technologies Ltd. reported constant currency revenue growth of 4.7% QoQ (our estimate: 4.5%), led by Asia (+ 23.1% QoQ) and passenger cars (+5.3% QoQ). Operating profit margin at 16.7%, was down 60 bps QoQ (our estimate: 16.6%), due to a 1m wage hike impact.
The company reiterated achieving a lower band of its revenue growth guidance (organic) of 18-22% as clients focus on cost reduction and prefer offshoring, while expecting outperformance in Ebitda margin of 20.5%+ despite pressure in certain original equipment manufacturers in Europe.
We tweak our FY25/26E earnings estimates by +1.7%/-4.1% QoQ on sustained growth momentum led by ramp ups from Asian OEMs. With this ongoing momentum we revise to our rating to ‘Accumulate' with DCF based target price of Rs 1,800 (implies 52 times FY27, ~2.5 times on PEG).
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