KPIT Technologies Q4FY14 Result Analysis

KPIT Technologies, a company focused on IT consulting & product engineering solutions and services, yesterday (April 28, 2014) reported its financial performance for the fourth quarter and year ended 31 March, 2014. The company registered a revenue growth of 3% to Rs 700 crore in the quarter on sequential basis. The income from its major market USA remained the same at Rs 490 crore, while income from UK and Europe (Rs 102 crore) dropped by 4.5% in the quarter on a sequential basis. Whereas, the income from rest of the world, which contributes around 15% of the total sales, increased by 35% and supported the improvement in the net sales of the company during March'14 quarter.

On the vertical front, the manufacturing segment which contributes the largest portion of income (39%) to KPIT Technologies, posted a growth of 4% on Q-o-Q basis. Energy & Utility segment also reported a growth of 23% to Rs 161 crore during the similar period. Moving to its income from SBUs, all its SBUs except business transformation unit registered a good growth on Q-o-Q basis. As informed by the company, it closed 3 new large contracts during Q4FY14, 2 in the SAP and 1 in automotive & engineering (A&E).

EBITDA margin of KPIT Technologies for Q4FY14 expanded by 77 basis points to 16.14%. The improvement in EBITDA margin was on account of growth in sales coupled with controlled operating expenses, which remained the same as a percentage of sales at 84% as compared to its previous quarter. The company's net profit stands at Rs 61.3 crore with a muted growth of 0.8% on Q-o-Q basis.

Further, during FY14, KPIT Technologies registered a good growth of 20% on both topline and bottomline front.  The topline stood at Rs 2694 crore on Y-o-Y basis and bottomline came in at Rs 249 for the same period.

In the guidance for the financial year 2014-15, the management of KPIT Technologies expects the revenue for FY15 to be in the range of USD 498 million – USD 506 million and PAT to grow by 18-21%. The management also expects to boost in the projects of SAP and A&E in H1FY15 and foresees the boost of upto 30% in the APAC region.