KPIT Cumm net up 22.6%

CORPORATE SCORECARD

Pune-based KPIT Cummins Infosystems' net profit jumped 22.59 per cent to Rs 12.68 crore in the first quarter ended June 30.

However, the rupee appreciation and wage hike plucked 9.8 per cent off the company's trailing quarter's net profit figure of Rs 14.06 crore. KPIT posted a consolidated revenue of Rs 135.29 crore, up 32.30 per cent growth compared with the same quarter in the last financial year and 3.83 per cent on a sequential basis.

The rupee appreciation has forced the company to revise its profit-after-tax (PAT) guidance from Rs 70-73 crore to Rs 63-68 crore for FY08.

Ravi Pandit, chairman and group chief executive officer, KPIT Cummins, said, "This quarter witnessed a robust growth in revenues. However, quarterly margins have taken a hit due to the rupee appreciation and salary increments. Our fundamentals continue to be very strong and Cummins Business Services partnership in the area of F&A BPO adds one more strong scalable offering to our portfolio for the manufacturing vertical."

Kishor Patil, CEO and managing director, said, "We see good traction for our automotive and semiconductor solutions as we continue our march to become the leader in this space. We have three sizeable deals in the automotive segment, and we expect to close them in the next 4-6 months. Pricing is stable with an upward bias."

Last quarter, the company ramped up its middle management with over 250 lateral hires globally. This coupled with an annual pay hike of 17 per cent contributed to lower than expected margins. However, the attrition rate has got down to 18 per cent from over 20 per cent in previous quarter and utilisation has marginally decreased from 71.4 per cent to 71 per cent.

Meanwhile, KPIT Cummins has reached an understanding to partner with Cummins Business Services (CBS) to deliver finance and accounting (F&A) services to Cummins.

The deal is expected to generate over $55 million (around Rs 220 crore) in revenues over the next 5 years. Besides, the earnings from non-Cummins customers is estimated to add another $35 million (around Rs 140 crore) in the F&A space to its overall revenues.