KPIT Technologies Q1 Results Review - Inline; Guidance Retained; Commentary Confident: Dolat Capital

Dolat Capital Report

KPIT Technologies Ltd. reported constant currency revenue growth of 4.7% QoQ (our estimate: 5%), led by passenger vehicles segment up 5.2% QoQ. Operating profit margin stood at 17.3%, up 56 basis points QoQ (our estimate: 16.7%), despite -70 bps impact due to ESOP costs.

The company retained its revenue growth guidance (organic) of 18- 22% and Ebitda margin of 20.5%+ despite increased competition.

We scale our FY25/26E earnings estimates by +1%/2.7% QoQ on sustained growth momentum driven by large engagements and ramp up from key OEMs.

However, recent run-up in stock price has made current valuation expensive; thus we revise our rating to ‘Reduce’ with DCF based target price of Rs 1,850 (implies 52 times FY26, ~2.5 times on PEG).

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