KPIT Tech Q1 results preview: Here's what brokerages expect from the IT player

Amid a busy earnings season, KPIT Technologies is scheduled to report its earnings for the quarter ended on June 30, 2023 (Q1FY24) on Tuesday. However, unlike the other IT companies, KPIT Tech is likely to report a strong growth in terms of topline and bottomline on a year-on-year (YoY) basis.

According to the brokerages, KPIT Tech is likely to report a revenue around Rs 1,050-1,100 crore, rising 55 per cent YoY, while profit after tax (PAT) is pegged around Rs 120-125 crore, about 50 per cent up YoY. EBITDA is seen around Rs 160-210 crore, while EBITDA margins are likely to expand. However, quarter-on-quarter (QoQ) performance may rise in single digits.

Analysts will be keenly watching guidance for FY24, new order wins and deal pipeline, spending outlook of US and Europe's auto OEMs, EBITDA margins outlook from the company management, post Q1 earnings. The Indian IT sector has been ailing lately on the back of a muted outlook by some bluest of the blue-chips.

Brokerage firm Phillip Capital expects KPIT Technologies to report a positive number in the June 2023 quarter, despite a soft quarter for the pack.  It expects strong CC revenue of growth on ramp up of deals announced in recent quarters and overall strong demand within Auto ER&D. Margins are expected to remain flat as large deal ramp-ups may increase costs in delivery.

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IT sees the company to report a revenue of Rs 1,068 crore, up 56 per cent YoY. It is penciling EBITDA at Rs 160 crore, rising 56 per cent YoY, with EBITDA margins coming in at 15 per cent, improving 10 bps on a yearly basis. PAT may rise 48 per cent YoY to Rs 126.3 crore, while sequential growth in revenue, EBITDA and PAT is seen between 4-5 per cent each.

Shares of KPIT Technologies surged more than 3 per cent during the early trading session on Tuesday to Rs 1,094.45 as its market capitalization surged more than Rs 30,000 crore. The scrip hd settled at Rs 1056.60 on Monday.

Another domestic brokerage firm Kotak Securities expects revenue to grow by 5 per cent QoQ to $130 million supported by deal ramp up and overall strong demand within Auto ER&D. The brokerage sees EPS rising 48 per cent on YoY to Rs 4.7 in Q1FY24 from Rs 3.2 in Q1FY23.

Kotak Securities expects KPIT Tech to clock a revenue of Rs 1,068 crore, up 56 per cent Yoy, while EBITDA margins may improve to 18.7 per cent, expanding 126 bps. The IT player may clock a profit of Rs 126 crore, increasing 48 per cent YoY in the quarter ended on June 30, 2023.

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Anand Rathi Shares and Stock brokers expect KPIT to witness a steady growth momentum in auto likely to persist and benefit from European exposure. It expects KPIT Tech to report a 30 per cent YoY rise in revenue at Rs 1,074 crore, with an EBITDA at Rs 210 crore and margins improved to 19.6 per cent. It pegs profit at Rs 120 crore, with a PAT margin of 11 per cent.

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