Buy KPIT Cummins; target of Rs 186: KRChoksey

9696 Investors following KPIT Cummins. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy KPIT Cummins; target of Rs 186: KRChoksey

KRChoksey is bullish on KPIT Cummins and has recommended buy rating on the stock with a target of Rs 186 in its October 24, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Sterlite Industries; target of Rs 132: IIFL Buy Bank of Baroda; target of Rs 989: Aditya Birla Money Accumulate Axis Bank; target of Rs 1380: Dolat Capital ALSO READ See previous views by KRChoksey See what other Experts & Brokerages are saying about KPIT Cummins See messages about KPIT Cummins KPIT Cummins BSE | NSE 30/05/12 Are Mutual Funds betting on KPIT Cummins?

KRChoksey is bullish on KPIT Cummins and has recommended buy rating on the stock with a target of Rs 186 in its October 24, 2011 research report.

"KPIT Cummins has signed three deals worth USD100 mn plus in Q2FY12. Beside these deals it has booked strong deal win worth around USD40 mn in SAP. Further, they have registered around 2%-3% increase in billing rate in case of new deal wins. Ability of the company to win huge deals at higher rates indicates its strategy of focus on selected areas is panning out well. The management expects this deal will start reflecting in revenue from Q4FY12E onwards."

"Volume (excluding revenue from financial services) increased by around 5% QoQ in Q2FY12 better than our expectation of around 4% QoQ. The growth was supported by strong growth momentum in top client Cummins i.e. by 12.5% QoQ. The company has changed its revenue recognition policy for third party license sale and reimbursement revenue in Q1FY12; adjusting for these changes revenue increased by 7% QoQ to USD70.1 mn in Q1FY12. It has divested its financial services business at the beginning of Q2FY12 as it has indicated in Q1FY12 that it is moving out of its non-core areas. Financial service business contributed 4.3% of the total revenue in Q1FY12."

"The company is currently in conversation with 5 OMEs/ Tier companies and of this 2 are committed assignments with OEMs (including one of the program targeting Chinese markets). However, it is currently working on improving life of batteries which will complete in next two - three quarters. Moreover, to put the product on road it is required to complete certain more tests under Central Motor Vehicle Rules and the same will take about one - two quarters. Because of the above said two factors the company expects Revolo could be commercially launch only in second-third quarter of FY13E. Considering, strong momentum in top client and huge deal win in the current quarter, we recommend 'BUY' on the stock with a price target of Rs.186 by assigning P/E multiple of 11 times to its FY13E EPS of 16.9. We have not considered any revenue flow from Revolo, which can provide positive upside to our target price," says KRChoksey research report.

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment