Views on KPIT Technologies 3QFY2014 results - Angel Broking

Views of Ms. Ankita Somani (Research Analyst - IT, Angel Broking) on KPIT Technologies 3QFY2014 results:

"KPIT Technologies (KPIT) reported its 3QFY2014 results which came in below our expectations on all fronts. The dollar revenues came in at US$110mn, down 2.3% qoq, impacted by lower billing days during the quarter as well as extended furloughs at some of the company's larger customers leading to unanticipated revenue loss of ~US$2mn. Offshore revenues grew marginally and there was volume growth of around 2% in offshore, whereas a volume decline of 2% in onsite business. Overall, for the quarter the volume growth was 1.2%. In INR terms, revenues came in at Rs. 678cr, down 3.5% sequentially. EBITDA margin of the company declined by ~10bp qoq to 15.4%. Management indicated that SAP SBU had the biggest impact on revenues due to loss in billing days in 3QFY2014. As a result, the revenues declined sequentially and this had a negative impact on the SBU margins. SAP SBU continued to be in red at the operating margin level in 3QFY2014. PAT came in at Rs. 61cr, down 9% on a qoq basis, impacted by soft operating performance. Overall, the performance from the company was weak keeping in view the performance from its peers. We recommend Neutral rating on the stock."

Source : Equity Bulls

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