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Revenues advanced - Volumes grow, Pricing marginally higher
EBIDTA margins - not a reflection of top line growth
Profits aided by forex gain
Revision in Guidance
SYSTIME’s financials will be consolidated from Q4FY12E and will contribute around $13 mn-$14 mn to the revenue. Company had acquired 50% of Systime for Rs104 crs and it would acquire the remaining 50% over the next 3 years for which it would have to pay ~Rs150-200 crs. In the current Qtr, the company has acquired additional 7.5% in SYSTIME. In addition, the board has approved an investment of upto $25 million in the company's wholly-owned US-based subsidiary, KPIT Infosystems Inc, in the form of loan/equity in a phased manner.
Valuation & Recommendations
Nirmal Bang are revising our numbers upwards for FY12E and FY13E factoring good growth the company showed in the current quarter. Nirmal Bang have revised Revenues and PAT by 4.0% and 9.2% respectively for FY12E and by 3.4% and 0.1% respectively for FY13E. At CMP, the stock is trading 10.2 times and 8.8 times FY12E and FY13E expected earnings. They continue to maintain ‘Hold’ view on the stock with a target price of Rs190
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The company reported good set of numbers and has revised guidance upwards for FY12E. For Q3FY12E, Dollar Revenues moved up 4.3% q-o-q, Rupee revenues climbed up 16.6% q-o-q and EBIDTA stretched 166 bps q-o-q.
Revenues advanced - Volumes grow, Pricing marginally higher
Revenues in $ terms grew 4.3% q-o-q, 21.6% y-o-y at $73.4 mn. This was supported by 4% volume growth q-o-q and Price improvement of 70-80 bps. In Rupee terms, revenues grew by 16.6% q-o-q, 38.4% y-o-y at Rs.378.9 crores. The Top Client ‘Cummins’ contributed 24% of the revenues, while the contribution from the Top 10 clients has gone down by 2.7% q-o-q.
EBIDTA margins - not a reflection of top line growth
EBIDTA margins expanded 166 bps q-o-q at 15.3%. The onsite revenues expanded (SAP business where margins are comparatively lower) 84 bps q-o-q and kept the margins subdued as against the robust top line growth. SAP business contributed 33.35% to the total revenues, increase by 274 bps q-o-q. Company continues to hold a strong order book position in this business.
Profits aided by forex gain
Net Profits rose by 21.7% q-o-q at Rs41.1 crs maintaining the margins at 11%. The company made forex gains of Rs.9.8 crores during the quarter.
Revision in Guidance
The company has upped its guidance for the full year i.e. FY12 from range of $275 mn - $285 mn given previously to $289 mn - $291 mn (excluding revenue from SYSTIME). It implies that the management expects revenue growth in the range of 2.3%-5% (in USD terms) in Q4FY12.
SYSTIME’s financials will be consolidated from Q4FY12E and will contribute around $13 mn-$14 mn to the revenue. Company had acquired 50% of Systime for Rs104 crs and it would acquire the remaining 50% over the next 3 years for which it would have to pay ~Rs150-200 crs. In the current Qtr, the company has acquired additional 7.5% in SYSTIME. In addition, the board has approved an investment of upto $25 million in the company's wholly-owned US-based subsidiary, KPIT Infosystems Inc, in the form of loan/equity in a phased manner.
Valuation & Recommendations
Nirmal Bang are revising our numbers upwards for FY12E and FY13E factoring good growth the company showed in the current quarter. Nirmal Bang have revised Revenues and PAT by 4.0% and 9.2% respectively for FY12E and by 3.4% and 0.1% respectively for FY13E. At CMP, the stock is trading 10.2 times and 8.8 times FY12E and FY13E expected earnings. They continue to maintain ‘Hold’ view on the stock with a target price of Rs190
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