KPIT Cummins revises guidance on good Q2 numbers

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KPIT Cummins revises guidance on good Q2 numbers

KPIT Cummins revenue has increased by 3% while its EBITDA is up by 28%, said its MD and CEO Kishore Patil. Its net profit, he said, has surged by 27% YoY. “We have revised the yearly guidance between Rs 77 crore and Rs 82 crore,” he said.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS KPIT Cummins Q2 net profit down at Rs 21.19 cr ALSO READ See latest News about KPIT Cummins See previous management interviews See what other Experts & Brokerages are saying about KPIT Cummins KPIT Cummins BSE | NSE 30/05/12 Are Mutual Funds betting on KPIT Cummins?

Commenting on KPIT Cummins ' second quarter results, its Managing Director and CEO Kishore Patil said that the company's revenue has increased by 3% while its EBITDA is up by 28%. Its net profit, he said, has surged by 27% YoY. "We have revised the yearly guidance between Rs 77 crore and Rs 82 crore," he said.

Here is a verbatim transcript of the exclusive interview with Kishore Patil on CNBC-TV18. Also watch the accompanying video.

Q: Could you take us as to how your topline has performed?

A: Revenues for this quarter have increased by 3% and the EBDITA has grown by 28% QoQ; net profits have increased by 27% YoY. The key part is that we have the bottom and we can see the customer acquisitions going well. So we have revised the yearly guidance between Rs 77 crore and Rs 82 crore.

Q: What is your topline because you had issues in the way Cummins was going in the business restructuring? Is it all beyond it, are you going to see a steady state of revenues coming from them in the next few quarters?

A: Yes most of those decisions are behind us. There are still a few projects which may get wind up but nothing significant actually. We see more traction in from other areas and new customers, we also see certain service areas in Cummins also the business going up. So I would say that the bad times are behind us.

Q: How are you looking at the rupee right now and could you just throw light on the hedge positions that you have as of today?

A: No, from the profitability perspective as long as KPIT realizes more than 45.5, we have taken the profitability based on that. So we would not be impacted by any changes in the dollar-rupee rate.

Q: So you are confident of meeting this guidance of Rs 77-82 crore even if the rupee were to go to Rs 43 as most people are talking about?

A: As long as it is above Rs 45 we are comfortable.

Q: Could you also share information about forex losses that would come in the P&L itself because this time it was a significant amount of Rs 13.1 crore?

A: I don't think there are any forex losses that are going to hit us in the next quarter. Our average realization has been 45.5 and based on that we have worked out the profitability.

Q: What about your PSU and defense business? How it is doing and also have you taken any kind of salary hikes?

A: We are expanding our current services to PSU sectors so we have got some traction specifically in the same service areas which we are operating today. With regard to increments and promotions, we have started with the promotions and increments will happen, as planned, on April 1.