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

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
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.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<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%+.


<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>Despite upping the FY24 guidance in the prior quarter (Q2FY24), KPIT is confident of beating even the raised guidance, led by strong Q3FY24 performance and an upbeat outlook.</li>
<li>Despite accelerated revenue in H1FY24 from the Honda engagement, Q3FY24 saw robust revenue growth of 4.3% QoQ in CC terms. EBITDA margin expanded to 20.6% vs 20% QoQ. </li>
<li>KPIT's new venture, Qorix, is coming along well and could prove to be transformative. This could enable KPIT to become a product company, alongside being a high-growth service company.</li>
</ul>


Despite upping the FY24 guidance in the prior quarter (Q2FY24), KPIT is confident of beating even the raised guidance, led by strong Q3FY24 performance and an upbeat outlook.
Despite accelerated revenue in H1FY24 from the Honda engagement, Q3FY24 saw robust revenue growth of 4.3% QoQ in CC terms. EBITDA margin expanded to 20.6% vs 20% QoQ. 
KPIT's new venture, Qorix, is coming along well and could prove to be transformative. This could enable KPIT to become a product company, alongside being a high-growth service company.


KPIT: On Track to Beat the FY24 Raised Guidance

<ul>
<li>KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.</li>
<li>KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&amp;D, especially Generative AI.</li>
<li>Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.</li>
</ul>


KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&amp;D, especially Generative AI.
Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>Tata Technologies (TT) raised around US$370m in its India IPO in Dec 2023.</li>
<li>Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>


Tata Technologies (TT) raised around US$370m in its India IPO in Dec 2023.
Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Tata Technologies IPO Lockup Expiry - US$1.5bn Lockup Release, Some Funds Are Sitting on 40x Gains

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)

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...

Ankit Agrawal, CFA

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...

Ankit Agrawal, CFA

KPIT: On Track to Beat the FY24 Raised Guidance

KPIT reported a strong Q3FY24 and is on track to beat even its upgraded FY24 guidance. Its new initiative, Qorix, is progressing well and holds...

Ankit Agrawal, CFA

KPIT: Stellar Q1FY24 Earnings

KPIT offers an upside potential of 19%+ IRR over a holding period of <3 years, through the end of FY26. KPIT is a direct beneficiary of rapid...

Ankit Agrawal, CFA

Tata Technologies IPO Lockup Expiry - US$1.5bn Lockup Release, Some Funds Are Sitting on 40x Gains

Tata Technologies raised around US$370m in its India IPO in Dec 2023. In this note, we talk about its upcoming US$1.5bn lockup release.

Sumeet Singh

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