Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

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Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kpit-technologies-ltd" target="_blank" data-smartkarma-citation="entities:35189:1" rel="noopener">KPIT Technologies ("KPIT")</a> reported a decent Q2FY25 with revenue growth of 20.1% YoY in constant currency (CC) terms. Growth came largely from Asia - Japan, Korea and India.</li>
<li>EBITDA margin has been steady at 20.5%+ and grew 27.7% YoY. This is despite the salary increments and one-time ESOP costs, which impacted the margin adversely by about 270bp.</li>
<li>KPIT has guided that FY25 revenue growth could be at the lower end of the guidance, however, profit margin is projected to be on the higher side led by offshoring.</li>
</ul>



KPIT Technologies ("KPIT") reported a decent Q2FY25 with revenue growth of 20.1% YoY in constant currency (CC) terms. Growth came largely from Asia - Japan, Korea and India.
EBITDA margin has been steady at 20.5%+ and grew 27.7% YoY. This is despite the salary increments and one-time ESOP costs, which impacted the margin adversely by about 270bp.
KPIT has guided that FY25 revenue growth could be at the lower end of the guidance, however, profit margin is projected to be on the higher side led by offshoring.


KPIT Tech: Steady Q2FY25 Although Near-Term Outlook Is Uncertain

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kpit-technologies-ltd" target="_blank" data-smartkarma-citation="entities:35189:1" rel="noopener">KPIT Technologies ("KPIT")</a> reported constant currency (CC) revenue growth of 24.8% YoY in Q1FY25. Q1FY25 PAT grew 42.2% YoY, excluding one-time gains. Middleware and Architecture Consulting segment led the growth.</li>
<li>EBITDA margin continues to expand led by operating leverage. Q1FY25 EBITDA margin grew to 21.1% vs 20.7% QoQ, despite two months of ESOP costs and quarterly promotions.</li>
<li>New engagements' TCV (Total Contract Value) at $202mm in Q1FY25 significantly exceeded the $150mm+ typical run-rate. KPIT's Qorix venture received all the regulatory approvals and was restructured as 50:50 JV.</li>
</ul>



KPIT Technologies ("KPIT") reported constant currency (CC) revenue growth of 24.8% YoY in Q1FY25. Q1FY25 PAT grew 42.2% YoY, excluding one-time gains. Middleware and Architecture Consulting segment led the growth.
EBITDA margin continues to expand led by operating leverage. Q1FY25 EBITDA margin grew to 21.1% vs 20.7% QoQ, despite two months of ESOP costs and quarterly promotions.
New engagements' TCV (Total Contract Value) at $202mm in Q1FY25 significantly exceeded the $150mm+ typical run-rate. KPIT's Qorix venture received all the regulatory approvals and was restructured as 50:50 JV.


External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

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<ul><li>KPIT Technologies Ltd. (KPIT) reported Q1FY25 revenue of Rs 1,365 Cr, reflecting a 3.6% QoQ and 24% YoY increase, in line with our expectations.</li><li>The operating profit was Rs 236 Cr, up 7% QoQ, surpassing expectations.</li><li>Operating margins expanded by 40bps to 21.1%, driven by strong volume growth and a favourable currency mix. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

KPIT Technologies Ltd. (KPIT) reported Q1FY25 revenue of Rs 1,365 Cr, reflecting a 3.6% QoQ and 24% YoY increase, in line with our expectations.The operating profit was Rs 236 Cr, up 7% QoQ, surpassing expectations.Operating margins expanded by 40bps to 21.1%, driven by strong volume growth and a favourable currency mix. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

KPIT Technologies Ltd. - Robust Execution; Resilient Outlook to Support Growth

<ul>
<li>KPIT raised its full-year FY24 revenue growth guidance to 37%+ from 27-30% earlier, led by a strong Q2FY24 performance. EBITDA margin guidance has been also raised to 20%+ from 19-20%.</li>
<li>Despite wage hike impact of 250bp, EBITDA margin came in at 20%, at the upper end of the 19-20% FY24 guidance. Operating leverage and realization improvement helped offset the impact.</li>
<li>With the strong Q2 performance, we are upgrading our FY24 PAT estimate to INR 580cr+ vs INR 550cr+ earlier and FY25 PAT of INR 730cr+ vs INR 700cr+ earlier.</li>
</ul>


KPIT raised its full-year FY24 revenue growth guidance to 37%+ from 27-30% earlier, led by a strong Q2FY24 performance. EBITDA margin guidance has been also raised to 20%+ from 19-20%.
Despite wage hike impact of 250bp, EBITDA margin came in at 20%, at the upper end of the 19-20% FY24 guidance. Operating leverage and realization improvement helped offset the impact.
With the strong Q2 performance, we are upgrading our FY24 PAT estimate to INR 580cr+ vs INR 550cr+ earlier and FY25 PAT of INR 730cr+ vs INR 700cr+ earlier.


<ul>
<li>KPIT reported a strong Q4FY24 led by 5.1% QoQ revenue growth in constant currency (CC) terms. EBITDA margin came in better than expected at 20.7%.</li>
<li>Overall, in line with our projection, KPIT even beat its upgraded guidance by posting YoY revenue growth of 39%+ in CC terms vs 37%+ guided.</li>
<li>KPIT has guided for a strong FY25 with revenue guidance of 18-22% in CC terms and EBITDA margin of 20.5%+.</li>
</ul>


KPIT reported a strong Q4FY24 led by 5.1% QoQ revenue growth in constant currency (CC) terms. EBITDA margin came in better than expected at 20.7%.
Overall, in line with our projection, KPIT even beat its upgraded guidance by posting YoY revenue growth of 39%+ in CC terms vs 37%+ guided.
KPIT has guided for a strong FY25 with revenue guidance of 18-22% in CC terms and EBITDA margin of 20.5%+.


India

KPIT Technologies Limited operates as a technology company. The Company specializes in embedded software, artificial intelligence, and digital solutions. KPIT Technologies serves automobile industry worldwide.

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KPIT Technologies (KPITTECH IN)

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KPIT Technologies Ltd. - Robust Execution; Resilient Outlook to Support Growth

KPIT Technologies Ltd. (KPIT) reported Q1FY25 revenue of Rs 1,365 Cr, reflecting a 3.6% QoQ and 24% YoY increase, in line with our expectations.

Axis Direct

KPIT: Raises Its Full-Year FY24 Guidance

Post the strong Q2FY24 performance, KPIT has upgraded its FY24 revenue growth guidance to 37%+ YoY vs 27-30% earlier. EBITDA margin guidance has...

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KPIT: Stellar Growth Continues

KPIT continues to post stellar growth on the back of robust demand environment led by big shift in technology upgradation in the automotive...

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