KPIT Cummins - March 2013 Results Preview - Motilal Oswal

- KPIT Cummins expects moderate growth in 4QFY13 unlike the spectacular 4Q in FY12. We model revenue growth of 2.1% QoQ to USD105.7m. This takes full year revenue to USD410.6m, above the lower end of its revenue guidance of USD408m. In Rupee terms, we expect revenue at INR5.73b, +1.8% QoQ.

- Margins are expected to remain stable in 4Q. Our estimate for EBITDA stands at INR892m, implying EBITDA margin of 15.6% (-10bp QoQ). Our SGA estimate for the quarter stands at 18.8%, +30bp QoQ.

- Our PAT estimate for the quarter is INR570m, down 5% QoQ, if we exclude the extraordinary item of INR94.5m in 3QFY13. PAT margin estimate is 9.9%, -70bp QoQ. Lower PAT QoQ is on account a higher tax rate, at 26%, v/s effective tax rate of 22.8% in the previous quarter. Also, our estimate for other income stands at INR50m, v/s INR77m in the previous quarter.

- The stock trades at 7.3x FY14E and 6.7x FY15E earnings. Maintain Buy.

Source : Equity Bulls

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