Dalal Street Investments
Top

BUY KPIT Cummins – Citi Research

July 18, 2007

KPIT Cummins has declared results inline with expectations from Citigroup Research Analysts. Citi has recommended a BUY with a price-target of Rs 180. Prabhudas Liladhar had recommended a BUY on this stock last November.

KPIT has secured $55 Million, one of the largest BPO contracts in the offshore space. The company reported revenue of Rs.1.35bn –- 3.8% qoq growth (expectations of Rs.1.3bn) and net profit declined 10% qoq to Rs.127mn (exp. of Rs.122mn).

Revenue guidance was upwardly revised to US$145-148mn (from US$143-144mn earlier) due to better visibility while net profit guidance was downwardly revised to Rs.630-680mn (from Rs.700-730mn earlier) due to stronger INR.

KPIT is expected to report an EPS of Rs 7.91 and Rs 10.97 for FY08 and FY09, a growth of 39% for each year over its last year. 12-month target price is Rs180 based on 16x our FY09E EPS. Target multiple is derived by applying a ~15% discount to multiple for peer Satyam Computers.

Comments

Got something to say?






Bottom