KPIT Technologies is scheduled to report its December quarter results on Tuesday, and the board is also expected to consider a proposal for an interim dividend later that day. The brokerage said investors will be watching for signs of mega-deals in the pipeline, updates on auto customer priorities in 2024, and comments on the threat of in-house production by a small number of customers.
The white space that needs to be addressed to continue participating in electrification and digitalization efforts by automotive OEMs and Tier 1 suppliers, the launch and stabilization of new connected vehicle platforms, and the shift towards cloud-based software applications. Evolving competitive environment due to transition Kotak Institutional Equities said development trends and the impact on medium-term pricing based on the conclusion of some development programs will also be watched.
The IT company is expected to see a 35% increase in revenue and a 44-52% increase in net profit for the December quarter, according to Net-net. Given the prevailing geopolitical concerns, major customer-specific issues, particularly from Europe, will also be monitored. Additionally, it includes updates on recently announced M&A and future inorganic capital and capital allocation plans that may be of interest to investors.
Kotak expects profit to rise 51.1% year-on-year to 154 million rupees and sales to rise 36.6% to 1,253 million rupees. EBIT is expected to increase by 63% to Rs 211.1 crore and EBIT margin to be 16.8% compared to 16% in the September quarter and 14.1% in the year-ago period. The deal is expected to be worth between $200 million and $250 million. KPIT expects revenue growth in fiscal 2024 to be more than 37% excluding the impact of currency fluctuations, and EBITDA margin forecast may remain at 20%.
The IT company indicated that if an interim dividend is declared, its record date will be notified separately.
Equilus Securities expects KPIT Tech’s profit to rise 35.40% year-on-year to 1,242.1 million rupees, while profit is expected to rise 43.90% year-on-year to 144.6 million rupees. “We expect USD revenue to increase 2.8% QoQ (CC growth of approximately 2.8% QoQ). EBIT margin is expected to improve slightly by 19 bps QoQ. Other revenue “We expect a quarter-on-quarter decline. We expect a decline in foreign exchange income.”
Philip Capital expects sales to rise 36.1% year-on-year to Rs 1,248.6 million and bottom line profit to rise 52% to Rs 152.8 million.
“CC revenue is expected to grow 4.1% sequentially, a solid 4.1% due to continued traction in automotive ER&D spending.TCV is expected to be in the range of $150 million to $200 million, consistent with the prior quarter. “Margins are expected to widen by +50bps due to strong growth and absenteeism,” he said. The brokerage indicated investors will be watching for FY24 guidance updates, deal numbers, and pipeline and spending outlook for U.S. and EU auto OEMs.
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