Firstcall Research is bullish on KPIT Cummins and has recommended buy rating on the stock with a target of Rs 128 in its December 12, 2012 research report.
“KPIT Cummins Infosystems was established in 1990 as KPIT Infosystems and became a public limited company in 1999. KPIT Cummins Infosystems Limited is a global IT consulting and product engineering partner, is focused on co-innovating domain intensive technology solutions for corporations specializing in automotive & transportation, manufacturing and energy & utilities. KPIT Cummins is focused on co-innovating domain intensive technology solutions for manufacturing corporations (in Automotive, Industrials, Hi-Tech verticals) and Diversified Financial Services to help its customers become more efficient, integrated and innovative enterprises. KPIT Cummins currently partners with 165+ global corporations including Original Equipment Manufacturers (OEMs), semiconductor companies and automotive Tier 1 companies.”
“KPIT Cummins Global Business Solutions (wholly-owned subsidiary) is to partner Cummins in delivering finance and accounting services to Cummins entities worldwide. The company has a strategic partnership with South Africa-based Business Connexion to enter the South African market. It is to have two offshore development centers for Dialog Semiconductor, a developer of mixed signal semiconductor solutions. The company is a member of Japan Automotive Software Platform ARchitecture to develop and establish a standard Japan automotive platform architecture.”
“KPIT Cummins Infosystems Ltd, a global IT consulting & product engineering partner, is focused on co-innovating domain intensive technology solutions for manufacturing corporations, reported its financial results for the quarter ended 30th Sep, 2012. The second quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.440.99 million against Rs.95.86 million in the corresponding quarter ending of previous year, an increase of 360.04%. Revenue for the quarter increase 33.19% to Rs.1910.26 million from Rs.1434.28 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.47 a share during the quarter, registering 128.12% increase over previous year period. Profit before interest, depreciation and tax is Rs.677.38 millions as against Rs.279.12 millions in the corresponding period of the previous year.”
“At the current market price of Rs 113, the stock P/E ratio is at 19.45 x FY13E and 17.28 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.5.81 and Rs.6.54 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 19% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 11.33 x for FY13E and 10.24 x for FY14E. Price to Book Value of the stock is expected to be at 2.81 x and 2.42 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 128 for medium to long term investment,” says Firstcall Research report.
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