Buy Trident; target of Rs 94: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Trident

KPIT's USD revenue/EBITA/PAT grew 8.3%/45.7%/32.7% YoY in 9MFY19. 3QFY19 revenue declined 1.7% QoQ in constant currency (3% miss). While Engineering SBU (43% of revenue) grew 6.4% QoQ, IT Business dragged with a decline of 7.5% QoQ due to completion of a few large projects. EBITDA margin shrank 60bp QoQ (excluding translation loss) - 110bp miss - due to weaker revenue. PAT declined 25% QoQ (+6% YoY) to INR656m, 14% below our estimate due to the operational miss.

Outlook

We value the three entities (KPIT-ITS, KPIT-Engineering and Birlasoft) separately - the IT businesses at a forward earnings multiple of 10x and Engineering business at 15x - to arrive at a price target of INR280 (29% upside). Maintain Buy.

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