23 October 2015
2QFY16 Results Update | Sector:
Technology
KPIT Technologies
BSE SENSEX
27,471
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD
b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
8,295
KPIT IN
198.0
26.8/0.4
233 / 85
16/-7/-22
251
77.7
CMP: INR135
TP: INR155 (+15%)
Neutral
Upgrading target on margin beat
Sustainable resurrection of profitability:
The company’s efforts over the last
two quarters to improve profitability resulted in a strong rebound in 2Q.
EBITDA margins expanded 440bp QoQ to 14% (v/s our estimate for flat
margins), led by pyramid rationalization, higher utilization and INR
depreciation. Although the margin expansion reflected most of the
improvement measures, the full benefit is expected to show up in 2HFY16.
Product engineering—the sole growth driver:
Revenue grew 5.3% QoQ to
USD125m, higher than our expectation of 2.2%. Growth was led by Product
Engineering Services or PES (10.9% QoQ) and SAP (9.5% QoQ). While revenue
growth in SAP and IES is expected to be tepid, PES remains the sole growth
segment and grew 30% YoY in 1HFY16 v/s 6% decline in KPIT (excluding PES).
Growth to be the focus area in 2HFY16:
While the management focused on
regaining lost ground on profitability in 1H, the focus in 2H would be on
reviving growth. Investments in account management, digital, annuity-based
revenues, and products & platforms are likely to start bearing fruit in 2H.
However, 3Q, is expected to be flat because of seasonality.
Margin-led upgrade in target:
We have increased our earnings estimates for
FY16/17 by 31.1/17.5%. Given the significant beat in margins in 2QFY16 and its
sustainability, we model EBITDA margin of 13.1% for FY16 and 14.1% for FY17.
However, with revenue growth hinged on PES, we have only accounted for the
beat on topline during the quarter—resulting in 1% revision. Relatively inferior
performance and problems around consistency and cash flow generation are
likely to keep valuations suppressed. Consequently, we maintain our
NEUTRAL
rating with a revised price target of INR155—discounts FY17E EPS by 10x.
Financials & Valuation (INR Billion)
Y/E MAR
Sales
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
P/E (x)
EV/EBITDA
( )
2015 2016E
29.9
3.3
2.4
11.8
-7.9
64.9
18.4
16.8
11.4
7.0
32.4
4.3
2.7
13.5
14.2
79.0
18.8
22.3
10.0
5.0
2017E
35.6
5.0
3.1
15.5
14.9
94.6
17.9
22.1
8.7
3.7
Estimate change
TP change
Rating change
Quarterly Performance (Indian GAAP)
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA Margin (%)
EBIT Ma rgi n (%)
Other i ncome
Interes t
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
Headcount
Uti l excl . tra i nees (%)
Offs hore rev. (%)
Fi xed Pri ce (%)
E: MOSL Es ti ma tes
1Q
115
1.4
6,897
12.5
26.5
14.4
12.1
9.7
101
40
30.4
508
-1.3
-15.5
2.5
9,490
70.2
42.8
28.4
FY15
2Q
3Q
125
126
8.5
1.2
7,574
7,798
7.8
15.0
29.7
31.1
16.4
17.2
13.3
13.9
10.1
11.1
42
25
39
51
8.1
22.3
706
653
39.1
-7.5
5.8
7.5
3.5
3.3
9,933
10,291
71.6
70.2
48.9
46.5
29.6
33.8
4Q
122
-3.2
7,630
9.0
25.2
20.7
4.5
1.6
177
150
-245.3
504
-22.9
-2.2
2.5
10,980
65.6
47.6
31.3
1Q
118
-3.3
7,583
9.9
28.1
18.5
9.6
7.3
106
47
27.9
444
-11.8
-12.6
2.2
10,839
66.4
44.7
26.2
FY16
2Q
3QE
125
125
5.3
0.7
8,123
8,278
7.2
6.2
32.1
32.1
18.1
18.1
14.0
14.0
11.9
11.9
86
81
44
60
25.4
27.0
751
733
69.1
-2.4
6.3
12.2
3.8
3.7
10,659
10,668
69.7
71.0
44.9
45.4
FY15
4QE
128
1.9
8,435
10.6
32.5
17.7
14.8
12.7
49
58
27.0
774
5.7
53.8
3.9
10,802
72.0
45.7
489
10.1
29,899
11.0
28.2
17.2
10.9
8.1
345
279
4.6
2,371
-0.8
11.8
10,980
69.3
46.5
FY16E
496
1.5
32,419
8.4
31.3
18.1
13.1
11.0
322
209
26.7
2,702
14.0
13.5
10,802
69.8
45.2
(INR Million)
Est. Var. (% /
bp)
2QFY16
121
3.1
2.2 312bp
7,857
3.4
3.7 350bp
28.1
405bp
18.5
-40bp
9.6
444bp
7.4 448bp
91
-5.2
78
-43.6
27.0
433
73.2
-2.4 7146bp
-38.6 4493bp
2.2
10,648
0.1
69.5
25bp
45.8
-89bp
Ashish Chopra
(Ashish.Chopra@MotilalOswal.com); +91 22 3982 5424
Sagar Lele
(Sagar.Lele@MotilalOswal.com); +91 22 3982 5585
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.

KPIT Technologies
2QFY16: Product Engineering and SAP drive revenue growth
KPIT’s 2QFY16 revenue grew 5.3% QoQ to USD125m, above our estimate of
2.2% QoQ growth to USD121m. The beat was primarily on account of a spike in
revenue growth from the SAP business unit (9.5% QoQ).
Product engineering services continued to see traction, and grew by 30% YoY in
1HFY16. This compares with 6% decline YoY revenues in the rest of the business
in the same period.
In Rupee terms, revenue was INR8,123m, up 7.2% QoQ, v/s our estimate of
INR7,857m (3.7% QoQ).
Exhibit 1: USD revenues grew 5.3% QoQ
USD revenue - m
Growth - QoQ (%)
125.0
105.5
2.0%
108.8
3.1%
112.2
109.7
3.1%
-2.3%
113.6
3.6%
115.2
8.5%
1.4%
126.4
122.4
118.3
124.6
5.3%
1.2%
-3.2%
-3.3%
Source: MOSL, Company
Strong beat on margins
Gross profit margin expanded by a significant 403bp QoQ to 32.1%. Most of the
margin expansion was attributed to operational efficiencies measures taken
over the last two quarters. With a headcount reduction across different levels,
and fresher hiring, rationalization of the pyramid contributed largely to margin
expansion.
Margins were also aided by improved utilization; onsite utilization was up 413bp
to 91.2% and offshore utilization was up 334bp to 69.6%.
SG&A expenses during the quarter were down to 18.1% of revenue, from 18.4%
in the previous quarter. Consequently, EBITDA margin during the quarter was
back to 14%, up 440bp QoQ, v/s our estimate of flat margins at 9.5%. Our
assumption of flat margins was based on a negative impact of wage hikes
offsetting the benefits of operational efficiency and INR depreciation.
Exhibit 2: Strong beat on EBITDA during the quarter
EBITDA margin (%)
SGA (%)
20.7
16.9
18.1
15.7
15.9
15.5
17.4
15.9
16.1
14.4
12.1
16.4
17.2
4.5
17.7
15.4
13.3
13.9
9.5
13.9
18.5
18.1
Source: MOSL, Company
23 October 2015
2

KPIT Technologies
Depreciation during the quarter was lower at INR167m v/s estimate of
INR171m. Due to currency movements during the quarter, other income was
INR86m v/s estimate of INR91m and interest expense was INR44m v/s estimate
INR78m as the company refinanced its debt at a lower interest rate.
Effective tax rate during the quarter was 25.5%, versus our estimate of 27%.
Consequently, PAT grew 69% QoQ to INR751m, against our expectation of
INR434m (2.4% decline QoQ).
Segment-wise performance: Growth driven by PES and SAP
Growth during the quarter was driven by Europe (14.7% QoQ) and APAC (14.5%
QoQ) while Americas grew by 1.2% QoQ. Among SBU’s PES grew by 10.9% QoQ
and SAP by 9.5% QoQ. While Energy & Utilities (19.8% QoQ), and Automotive &
Transportation (5.8% QoQ) saw healthy growth, manufacturing remained
subdued (-2.1% QoQ).
Exhibit 3: Europe and APAC saw high growth during the quarter
Geographies
America
Europe
APAC
Contr. to
2Q Rev. (%)
67.0
18.2
14.8
Growth –
QoQ (%)
1.2
14.7
14.5
Contr. to
2Q Rev. (%)
Growth –
YoY (%)
16.1
0.0
46.5
32.3
37.4
-25.6
Source: Company, MOSL
Contr. to
2Q Rev. (%)
Growth –
YoY (%)
Exhibit 4: Auto & Engg continues to see healthy growth while IES is still the weak point
Lines of Business
IES
Auto & Engg
SAP
BTU
Contr. to
2Q Rev. (%)
37.0
31.8
21.9
9.3
Growth –
QoQ (%)
-0.1
10.9
9.5
0.3
-0.1
-3.1
62.4
5.4
37.9
-3.2
0.1
-0.6
Source: Company, MOSL
Contr. to
2Q Rev. (%)
Growth –
YoY (%)
Exhibit 5: Energy & Utilities bounces back
Verticals
Automotive & Transportation
Manufacturing
Energy & Utilities
Others
Contr. to
2Q Rev. (%)
37.3
33.3
21.2
8.2
Growth –
QoQ (%)
5.8
-2.1
19.8
2.2
40.9
0.1
-14.3
4.9
69.9
-2.3
3.4
-14.9
Source: MOSL, Company
Revenues from the top client saw 5.4% QoQ growth during the quarter, after
three consecutive quarters of decline. This was indicative of the top client
bottoming out after depressed growth. However, there was a decline in the top
2-5 clients to the extent of 1.2% QoQ.
23 October 2015
3

KPIT Technologies
Exhibit 6: One of the Top 2-5 client drove the decline during the quarter
Top Clients
Top Client - Cummins
Top 2-5 Clients
Top 6-10 Clients
Contr. to
2Q Rev. (%)
14.2
15.5
11.8
Growth –
QoQ (%)
5.4
-1.2
7.9
Contr. to
Growth –
2Q Rev. (%)
YoY (%)
14.4
-5.2
-3.8
-9.9
17.3
9.6
Source: Company, MOSL
Exhibit 7: Cummins revenue was flat QoQ
Top Client (USD m)
10.9
1.0
-3.0
4.2
1.6
6.1
QoQ Gr (%)
Exhibit 8: Sharp rebound in SAP since the last two quarters
SAP (USD m)
7.9
5.4
-1.1 -0.8
-8.2
-1.8
3.6
-1.4 0.5
-3.4
-5.8 -4.8
-8.7
QoQ Gr (%)
17.4
9.5
8.7
4.5
3.6 1.9
-11.5
-10.2
-27.9
Source: MOSL, Company
Source: MOSL, Company
Takeaways from management commentary
Margin expansion earlier than anticipated:
EBITDA margins expanded by 440bp
during the quarter, while expectations were that of flat margins. The growth
was primarily driven by [1] Operational efficiency: progress in the areas of net
reduction of people across levels, fresh graduate hiring, and cutting down on the
long tail of customers, [2] Utilization: onsite utilization was up 413bp to 91.2%
and offshore utilization was up 334bp to 69.6%, and [3] INR depreciation: 70bp
contribution to margin expansion. The management expects the margin
improvement to be sustainable. Although most of the improvement came
through during this quarter, the full impact of the steps taken will be seen over
2HFY16.
Automotive engineering to continue driving growth:
Performance has been
strong and consistent in automotive engineering. The company sees this
continuing as it has a healthy pipeline driven by growth in infotainment,
electronics in powertrain/batter management, and standardization.
SAP and IES to show some growth:
The management expects some growth
from SAP and IES, as these have seen some deal wins. However, the effect of
cannibalization continues to play on these practices. Despite increased traction
in HANA, SuccessFactors, and other cloud-based platforms, smaller deal sizes
have been affecting revenue growth.
Increasing portion of AMS in SAP:
Revenues from AMS have been inching up,
thus improving the quality of revenues, and increasing stability. While the
proportion of AMS in SAP revenues was in the mid-20s in the previous year, the
company is targeting for it to be in the mid-30s this year. Its long term goal
however is for AMS to be 50% of the SAP revenues.
Focus of 2H on driving growth:
KPIT has been making investments in the areas
of products & platforms, IMS, and digital technologies. It expects these
investments to start bearing fruit going ahead. Moreover, focus on growth is
4
23 October 2015

KPIT Technologies
expected to revive as the company has initiated some actions including
investments in account managers, engineering + IT solutions, and acquisition of
new enterprise accounts. The management maintained its earlier guidance of
equal or marginal growth in revenues and profitability in FY16, over the previous
year.
Change in estimates: Increasing estimates by 31.1%/17.5% for FY16/FY17
Post the 2Q result, we are increasing our revenue estimates by 1% for FY16 and
FY17 each, to account for the beat during the quarter. With this we are
expecting USD revenue growth of 1.7% for FY16 and 7.1% for FY17. We haven’t
revised it upwards further as growth continues to be hinged on to Automotive
and Engineering.
With the quick recovery in EBITDA margins, and the sustainability around it, we
have increased our EBITDA margin estimates by 220bp for FY16 and 130bp for
FY17. The margin expansion is the primary cause of the increase in earnings
estimate.
Additionally, we have tweaked our estimates slightly to account for the higher
interest cost, resulting out of the sanction for a new term loan to be availed for
the construction of a new facility on KPIT’s land of 25 acres in Hinjewadi, Pune.
The total quantum of the loan will be ~USD20m, at an interest rate of 2.25% per
annum.
Exhibit 9: Change in estimates
Revised
FY16E
FY17E
65.3
67.0
496.1
531.3
1.5
7.1
13.1
14.1
13.5
15.5
14.2
14.9
Earlier
FY16E
FY17E
65.3
67.0
489.6
526.1
0.1
7.4
10.9
12.8
10.3
13.2
(12.9)
28.3
Change
FY16E
FY17E
0.1%
0.0%
1.3%
1.0%
130bp
-40bp
220bp
130bp
31.1%
17.5%
Source: MOSL, Company
INR/USD
USD Revenue (m)
USD revenue growth (%)
EBITDA Margin (%)
EPS (INR)
EPS Growth (%)
23 October 2015
5

KPIT Technologies
Valuation and view
KPIT has a sharp focus on Automotive Engineering Services, where it has seen
sustained growth over the last few years. Its leadership position in the segment,
and healthy growth potential in the foreseeable future auger well for overall
performance.
However, KPIT’s SAP segment has continued to elude stability – with a
significant slump (28% QoQ) in 4QFY15 revenues, and a strong rebound (17%
QoQ) in 1QFY16. The shift to cloud through SuccessFactors has hit deal sizes in
the segment and KPIT continues to grapple with the same. It has also started
facing similar issues in IES, leading to tepid growth expectations for both these
segments. As a result, Product Engineering Services remains the sole growth
segment.
4QFY15’s profitability miss was significant as margins plummeted to the lowest
levels in history. While this was marred by multiple one-offs, the company took
up the objective of profitability improvement in 1HFY16. In 2Q, it managed to
regain lost ground, on a sustainable basis, with the full impact of the measures
taken to reflect in some more uptick over the next two quarters.
Over FY16 and FY17, while profitability has returned, revenue growth remains
an area of concern with dependency on PES. The company has made several
investments which are expected to start reflecting in growth numbers over the
next two quarters, there is little visibility on revenue growth rebounding to
industry levels.
KPIT trades at 10xFY16E and 8.7xFY17E EPS. We expect the company to grow its
USD revenues at a CAGR of 4.2% over FY15-17E and EPS at a CAGR of 14.6%
during this period. Contribution to our EPS CAGR comes from EBITDA margin
expansion of 325bp from FY15 to FY17 to 14.1%.
Relatively inferior performance; and problems around consistency and cash flow
generation are likely to keep valuations suppressed. Consequently, we maintain
our NEUTRAL rating, with a revised price target of INR155, which discounts
FY17E EPS by 10x.
Key triggers
Improved growth outlook from segments other than Product Engineering
Growth recovery in SAP
Reflection of growth measures in financial performance
Key risk factors
Continued inconsistency in revenue growth
Risk from increasing adoption of cloud based Oracle services
Lumpiness in margin performance
23 October 2015
6

KPIT Technologies
Exhibit 10: 1-year forward PE band
25
20
15
10
5
0
2.0
11.0
9.9
PE (x)
Peak(x)
Avg(x)
23.1
Min(x)
6.0
5.0
4.0
3.0
2.0
1.0
0.0
0.5
1.4
2.3
5.5
Exhibit 11: 1-year forward PB band
PB (x)
Peak(x)
Avg(x)
Min(x)
Exhibit 12: Comparative valuation
Company
Mphasis
Mindtree
KPIT Tech
Hexaware
Persistent Sys.
Mkt cap Rating TP (INR) Upside
EPS (INR)
P/E (x)
RoE (%)
FY15-17E CAGR (%)
(USD b)
(%)
FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E USD rev. EPS
1.5
2.0
0.4
1.2
0.8
Neutral
Neutral
Neutral
Sell
Neutral
520
1400
155
255
665
15.6
-6.0
14.8
0.8
0.2
32.3
63.9
11.8
10.6
36.3
35.7
73.1
13.5
13.9
38.8
40.9
93.2
15.5
16.3
47.3
13.9
23.3
11.4
23.8
18.3
12.6
20.4
10.0
18.2
17.1
11.0
16.0
8.7
15.6
14.0
12.8
29.4
18.4
25.7
22.1
13.2
27.9
18.8
30.7
20.6
14.3
29.3
17.9
34.1
3.3
15.4
4.2
16.5
12.6
20.8
14.6
23.6
21.9
16.0
14.1
Source: Company, MOSL
23 October 2015
7

KPIT Technologies
Story in charts
Exhibit 13: Offerings focused on select verticals, with mix of
IT and Engg
Vertical distribution
Others, 9.2
Energy &
Utilities,
20.1
Automotive
, 37.0
59.1
Manufactur
ing, 33.8
Source: Company, MOSL
FY11
79.6
FY12
99.0
FY13
Exhibit 14: Auto Engg to be the key growth driver going
forward
Auto & Engg Revenues (USD)
34.6%
24.4%
11.1%
110.1
FY14
147.6
FY15
YoY growth
34.1%
Source: Company, MOSL
Exhibit 15: SAP remains extremely volatile
SAP (USD m)
QoQ Gr (%)
Exhibit 16: FY16 to see marginal growth over FY15
17.4
USD revenue (m)
9.5
38.6
-27.9
33.6
444
489
10.1
1.5
FY14
FY15
FY16E
496
531
7.1
YoY growth (%)
7.9
3.6
-1.4 0.5
-1.8
-3.4
-5.8 -4.8
-8.7
8.7
4.5
32.6 32.0 30.2 28.7 28.3 28.4 26.0 26.9 26.0 28.2 29.5 21.3 25.0 27.3
307
FY12
Source: Company, MOSL
410
FY13
8.3
FY17E
Source: Company, MOSL
Exhibit 17: Margin recovery likely post FY15 decline
EBITDA margin
16.3% 15.7%
13.9%
10.9%
13.1%
14.1%
Exhibit 18: PAT growth in FY16 largely a function of margin
expansion
PAT (INR m)
2,489 2,371
2,716
3,105
15.0%
1,996
857
948
1,315
659
FY11
FY12
FY13
FY14
FY15
FY16E
FY17E
FY09
FY10
FY11
FY12
FY13
FY14
FY15 FY16E FY17E
Source: Company, MOSL
Source: Company, MOSL
23 October 2015
8

KPIT Technologies
Exhibit 19: Operating metrics
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
Geography Analysis (%)
USA
Europe
ROW
LOB Analysis (%)
Integrated Enterprise Solutions
Auto & Engg
SAP
Business Transformation Unit
Customer Details
No. of Customers Added
No. of Active Customers
Customers with a runrate of > $1m
Top Customer - Cummins
Top 5 Customers (%)
Top 10 Customer (%)
Revenue Split (%)
Onsite Revenues
Offshore Revenues
Contract Type (%)
T&M
FP
Debtor Days
HR - Details
Development Team:
Onsite (Avg)
Offshore (Avg)
Onsite FTE
Offshore FTE
Total FTE
Development
Support
Marketing
Total
Utilization (%)
Onsite
Offshore (Incl. Trainees)
92.4
72.9
88.1
71.3
90.1
70.9
90.8
70.2
91.1
71.6
90.2
70.2
85.8
65.6
87.1
66.4
91.2
69.7
1,243
6,708
1,148
4,888
6,036
8,122
548
146
8,816
1,274
6,987
1,123
4,985
6,108
8,430
554
152
9,136
1,366
7,139
1,231
5,064
6,295
8,583
558
155
9,296
1,423
7,224
1,293
5,068
6,361
8,757
568
165
9,490
1,456
7,518
1,327
5,383
6,710
9,191
572
170
9,933
1,494
7,868
1,348
5,519
6,867
9,541
575
175
10,291
1,534
8,317
1,316
5,456
6,772
10,213
586
181
10,980
1,564
8,514
1,362
5,654
7,016
10,062
585
192
10,839
1,568
8,416
1,430
5,870
7,300
9,883
578
198
10,659
76.4
23.6
75.6
24.4
72.9
27.1
71.6
28.4
65.1
29.6
62.9
33.8
63.7
31.3
72.9
26.2
72.1
27.1
54.6
45.4
52.8
47.2
54.3
45.7
57.2
42.8
51.1
48.9
53.5
46.5
52.4
47.6
55.3
44.7
55.1
44.9
3.0
192.0
78.0
16.5
38.0
46.3
3.0
195.0
78.0
17.9
38.2
47.6
3.0
198.0
80.0
15.5
35.7
45.8
3.0
201.0
83.0
15.9
34.3
45.1
3.0
204.0
84.0
14.9
32.1
42.8
3.0
206.0
87.0
14.6
28.6
39.4
2.0
208.0
90.0
14.9
30.1
41.6
2.0
210.0
87.0
14.2
30.7
42.2
2.0
212.0
88.0
14.2
29.7
41.5
39.5
24.2
25.3
11.0
40.5
25.3
23.7
10.6
39.2
25.9
23.7
11.2
40.4
26.3
22.6
10.7
38.0
30.0
22.6
9.4
38.7
29.1
23.3
8.9
38.3
35.1
17.4
9.2
39.0
30.2
21.1
9.7
37.0
31.8
21.9
9.3
71.9
13.8
14.5
72.7
15.4
12.0
69.8
14.5
15.8
69.1
15.8
15.1
66.5
13.7
19.8
67.3
15.5
17.2
64.5
16.9
18.6
69.7
16.7
13.6
67.0
18.2
14.8
75
76
87
82
80
83
82
85
82
Source: Company, MOSL
23 October 2015
9

KPIT Technologies
Financials and valuations
Key Assumptions
Y/E March
INR/USD Rate
Revenues (USD m)
Offshore Revenue (%)
Total Headcount
Net Addition
Per capita productivity (USD)
Offshore Utilization (%)
Onsite Utilization (%)
Income statement
Y/E March
Sales
Change (%)
Cost of Services
SG&A Expenses
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Minority Interest
PAT
Extraordinary
Net Income
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loan & other long term liabilities
Capital Employed
Fixed Assets
Other LT assets
Curr. Assets
Debtors
Cash & Bank Balance
Loans & Advances
Current Liab. & Prov
Net Current Assets
Application of Funds
E: MOSL Estimates
FY10
47.3
154.6
59.8
4,918
342
31,440
71.2
91.2
FY11
45.7
221.7
57.2
6,514
1,596
34,031
68.5
89.8
FY12
48.5
307.3
52.1
7,719
1,205
39,808
72.6
91.9
FY13
54.5
410.4
46.2
8,321
602
49,326
73.9
94.1
FY14A
60.6
444.3
46.0
9,296
975
47,798
72.1
91.1
FY15
61.1
489.0
46.5
10,980
1,684
44,536
69.3
89.5
FY16E
65.3
496.1
45.2
10,802
(178)
45,929
69.8
90.1
FY17E
67.0
531.3
45.9
11,338
536
46,860
73.0
91.5
(INR Million)
FY17E
35,597
9.8
24,152
6,425
5,020
14.1
802
211
246
4,253
1,148
27.0
0
3,105
0
3,105
14.3
(INR Million)
FY17E
382
18,502
18,884
-
1,473
20,356
3,295
5,462
17,915
8,297
7,951
1,666
8,785
9,129
20,356
FY10
7316
-7.8
4091
1611
1614
22.1
308
27
-253
1026
169
16.5
0
857
0
857
30.2
FY11
10120
38.3
6492
2106
1522
15.0
411
26
18
1103
155
14.0
0
948
0
948
10.5
FY12
14897
47.2
9934
2885
2078
13.9
445
78
128
1683
437
25.9
-31
1215
100
1315
38.8
FY13
22386
50.3
14640
4096
3650
16.3
466
154
-170
2860
766
26.8
-86
2009
-13
1996
51.7
FY14
26940
20.3
18180
4528
4233
15.7
540
287
-74
3332
941
28.2
0
2391
98
2489
24.8
FY15
29,899
11.0
21,473
5,155
3,271
10.9
851
279
345
2,486
114
4.6
0
2,371
0
2,371
-4.7
FY16E
32,419
8.4
22,282
5,860
4,277
13.2
688
209
322
3,702
985
26.6
0
2,716
0
2,716
14.6
FY10
312
3,559
3,871
51.2
1,108
5,030
1,522
950
3,117
1,388
1,052
677
1,306
1,811
5,030
FY11
340
5,692
6,032
63.7
1,105
7,201
1,581
1,300
5,719
2,525
2,096
1,097
1,875
3,844
7,201
FY12
356
6,769
7,125
333.7
1,189
8,649
1,853
4,527
6,983
4,380
1,838
766
4,714
2,269
8,649
FY13
386
9,976
10,362
270.2
1,602
12,235
2,005
5,785
8,005
4,673
1,921
1,412
5,597
2,409
12,235
FY14
381
12,355
12,736
-
1,549
14,285
2,161
5,994
10,122
6,743
1,908
1,471
6,949
3,173
14,285
FY15
381
12,573
12,954
-
1,211
14,165
2,328
5,088
13,149
6,979
4,228
1,942
8,536
4,613
14,165
FY16E
382
15,397
15,779
-
2,073
17,851
2,896
5,462
15,376
7,711
6,116
1,549
8,165
7,211
17,851
23 October 2015
10

KPIT Technologies
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Fixed Asset Turnover (x)
FY10
5.4
7.4
24.5
0.7
12.9
FY11
5.7
7.7
34.4
0.7
12.3
FY12
8.0
9.1
39.0
0.7
8.7
26.0
22.9
17.5
2.4
5.3
0.3
30.9
32.8
69
4.3
19.1
18.2
91
6.5
18.5
20.6
107
8.8
FY13
10.6
12.5
52.2
0.9
8.5
12.8
10.8
7.1
1.2
2.6
0.7
23.0
30.5
76
11.5
FY14
12.9
14.7
63.8
1.1
8.6
10.5
9.2
6.1
0.9
2.1
0.8
20.5
27.5
91
12.9
FY15
11.8
16.1
64.9
1.2
10.1
11.4
8.4
7.0
0.8
2.1
0.9
18.4
16.8
85
13.5
FY16E
13.5
17.0
79.0
1.5
11.1
10.0
8.0
5.0
0.7
1.7
1.1
18.8
22.3
87
12.6
FY17E
15.5
19.6
94.6
2.0
12.9
8.7
6.9
3.7
0.5
1.4
1.5
17.9
22.1
85
11.6
Cash Flow Statement
Y/E March
CF from Operations
Cash for Working Capital
Net Operating CF
Net Purchase of FA
Net Purchase of Invest.
Net Cash from Invest.
Proc. from equity issues
Proceeds from LTB/STB
Dividend Payments
Cash Flow from Fin.
Net Cash Flow
Exchange Diff/Cash from sub.
Opening Cash Bal.
Add: Net Cash
Closing Cash Bal.
E: MOSL Estimates
FY10
1,245
-169
1,076
-905
-530
-1,435
27
-104
-55
-132
-491
47
1,671
-491
1,052
FY11
1,217
-574
643
-882
207
-675
1,203
-96
-64
1,043
1,011
115
1,052
1,011
2,096
FY12
1,874
-870
1,005
-3,002
174
-2,828
65
1,091
-72
1,084
-739
477
2,096
-739
1,838
FY13
2,286
-1,083
1,204
-1,730
-1,769
-3,499
1,706
1,192
-145
2,753
458
-3
1,838
458
1,921
FY14
2,760
-1,730
1,030
-2,023
112
-1,912
75
951
-197
829
-53
57
1,921
-53
1,908
FY15
3,150
880
4,029
-1,184
85
-1,099
0
-610
0
-610
2,320
-184
1,908
2,320
4,228
FY16E
3,576
-710
2,866
-1,256
1,610
0
-1,256
0
149
0
149
1,759
-2,547
4,228
1,759
(INR Million)
FY17E
4,030
-83
3,947
-1,200
2,747
0
-1,200
0
-811
0
-811
1,936
-3,138
6,116
1,936
23 October 2015
11

KPIT Technologies
Corporate profile: KPIT Tech
Company description
KPIT Cummins is a leading technology solutions
partner for global manufacturing corporations,
with special focus on automotive, energy &
utilities, industrial equipments and semiconductor
industries. With over USD463m revenue (LTM) and
9,933 employees, company continues to focus on
its chosen areas to grow, with equal thrust on
organic and inorganic approaches.
Exhibit 20: Sensex rebased
Exhibit 21: Shareholding pattern (%)
Jun-15
Promoter
DII
FII
Others
21.7
7.7
29.2
41.4
Mar-15
21.7
11.2
31.2
36.0
Jun-14
22.2
7.7
37.7
32.4
Exhibit 22: Top holders
Holder Name
Warhol Ltd
Fidelity Puritan Trust-Fidelity Low-Priced Stock Fund
Van Dyck
Smallcap World Fund INC
ACACIA Partiners LP
% Holding
9.9
4.6
3.9
3.7
3.1
Note: FII Includes depository receipts
Exhibit 23: Top management
Name
Ravi Pandit
Kishor Patil
Sachin Tikekar
Anil K. Patwardhan
Designation
Chairman & Group CEO
Managing Director & CEO
President – Strategic Relationships
SVP & Head – Corp. Finance
Exhibit 24: Directors
Name
Ravi Pandit
Kishor Patil
B V R Subbu*
Adi Engineer*
Amit Kalyani*
Dr. R. A. Mashelkar*
Name
Lila Poonawalla*
Prof. Alberto Vincentelli*
Sanjay Kukreja*
Sachin Tikekar
Anant Talaulicar
Dwayne Allen
*Independent
Exhibit 25: Auditors
Name
BSR & Co LLP
Type
Statutory
Exhibit 26: MOSL forecast v/s consensus
EPS (INR)
FY16
FY17
MOSL forecast
13.5
15.5
Consensus
forecast
10.8
13.9
Variation (%)
24.7
11.7
23 October 2015
12

KPIT Technologies
NOTES
23 October 2015
13

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