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You are here : IndiaNotes >> Research & Analysis >> Companies >> KPIT Technologies Ltd. >> Research

SMC recommend KPIT Technologies for a short-term perspective

SMC | 01 Sep, 2016  | Follow Author | Add to my Favourites 
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The management of  the  company  is  very  positive  towards  the  growth  in  the second  half  of  FY17  on  account  of  growth  investments  and  new  offerings. According to that its pipeline of deals in products, enterprise and engineering segments  is  reasonable  and  would  lead  the  financial  growth.


Business  Profile


KPIT  Technologies  Limited  is  engaged  in  providing  software  and  information technology  (IT)  enabled  services  globally.  The  principal  businesses  of  the Company  are  computer  programming,  consultancy  and  related  activities.  The Company  operates  as  product  engineering  and  IT  consulting  partner  for automotive, manufacturing, and energy and utilities companies. The Company operates  in  the  USA,  UK  &  Europe  and  Rest  of  World  segments  and  Its subsidiaries include  KPIT Infosystems  Inc.,  KPIT Technologies (UK)  Limited and KPIT  Infosystems  ME FZE.


INVESTMENT  RATIONALE

  • The Company has a  global  extended  product lifecycle  management (EPLM)  practice, which offers consulting,  platform based products, enterprise  level  analytics,  application management services  (AMS)  and  enterprise  cost  management solutions.
  • During Q1 FY16,  revenue  from  the  US market grew  3  per  cent  while revenue  from  the  UK and Europe rose 22 per cent and the rest of the world 9 per cent on a year on year basis. Moreover, it  has reported nearly 30 per cent rise in  consolidated net profit at Rs 55 crore and  its  income  from  operations  rose  nearly  6  per cent  to  Rs 803.2  crore  as  against  Rs 759.3 crore  in  the  year-ago  period.
  • According to  the  management of  the  company,  due  to  top  client  challenges  environment, margins of  company  has  been  affected  during  Q1FY17 but  through  restructuring  its  cost, expenses and steady recovery in  revenue growth in  H2FY17 would guide the  growth of the  company.
  • The company is going through internal changes in structure as well as external changes in  the  business  environment  and  expecting  good  traction  in  the  newer  areas  of  cloud  and digital  technologies.


We recommend a buy in  the  stock of KPIT TECHNOLOGIES LIMITED for a short-term perspective.  The  stock  is  trading  at  its  good  support  level  with good  fundamental  records and is expected to move up from this level. It made a 52 week low Rs98.00 and 52 week high  of  Rs  196.60.  Buy  around  at  130  with a  closing  below  stop  loss  of  Rs.122  levels  for  the target  of  Rs.147.


Note: ŸFollow  Strict  Stop  Loss

 


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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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