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KPIT Q2 net doubles; ups guidance on revenue, margins

The company's co-founder, managing director and chief executive Kishor Patil said based on the encouraging numbers posted in the first half, it is revising up its revenue growth guidance for FY22 to 16-18 per cent from the earlier expectation of mid-teens.

November 01, 2021 / 09:23 PM IST
 
 
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Auto industry-focused IT firm KPIT Technologies on Monday reported more than doubling of its September quarter net profit at Rs 65.1 crore, and also upped its performance guidance for the remainder of the fiscal as demand for services has revived fast.

The Pune-headquartered company had posted a post tax net profit of Rs 27.1 crore in the year-ago period and Rs 60.2 crore in the preceding June quarter.

Its total income grew to Rs 600 crore from Rs 487 crore in the year-ago period and Rs 577 crore in the previous quarter.

The company's co-founder, managing director and chief executive Kishor Patil said based on the encouraging numbers posted in the first half, it is revising up its revenue growth guidance for FY22 to 16-18 per cent from the earlier expectation of mid-teens.

An expansion in the operating profit margin to 17.6 per cent from the year-ago period's 14.3 per cent and the quarter ago's 17.3 per cent was one of the major contributors to profit growth.

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The margin expansion was attributed to higher offshoring, higher realisations and productivity gains.

Patil said the company has also increased its FY22 operating profit target to 17.5 per cent from the earlier 16.5 per cent.

With the demand going up in the industry, attrition shot up by two percentage points to over 20 per cent during the quarter and the company is focusing on retention initiatives like increments and other benefits, Patil said.

The company's talent is being sought by both auto industry and also pure-play technology companies, Patil said, adding that he expects the situation to stabilise in over four months.

Initiatives like a tie-up with ZF for joint development of software defined vehicles, and bigger client engagements like a USD 50 million, five-year deal with a European automaker make the company more confident about the future.

The company, which had Rs 933 crore in cash at the end of the reporting quarter, will also look at acquisitions to expand its talent base or get access to niche technologies, he said.

Patil said the company is not impacted by the ongoing chip shortage in the auto industry as it deals with future development, where the budgets have not been cut.

The KPIT scrip closed 0.24 per cent up at Rs 309.65 a piece on the BSE on Monday, as against gains of 1.40 per cent on the benchmark.
PTI
first published: Nov 1, 2021 09:23 pm

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