KPIT Tech down in the red

KPIT Technologies is down in the red. On the back of its poor performance for Q3FY16, the stock fell over 6% intra day to Rs.134.50.

For Q3FY16, net profit fell 2% (QoQ) to Rs.74 crore and revenue was static at Rs.813 crore. Dollar revenue stood at $ 123.28 million, a sequential decline of 1%. Services revenue was at $ 118.57 million, flat QoQ. Amongst the top customers, there was a large decline in one of the top 5 customers in Q3FY16 due to project closures and higher furloughs resulting in a decline of 9.4% and 6% in the top 5 and top 10 customers respectively. There was a decline in the Products & Platforms SBU mainly due to a reduced delivery schedule in Intelligent Transportation Solutions (ITS) during the quarter.

EBITDA Margins for the quarter improved by 57bps to 14.59% led by expansion in gross margins and also aided by the rupee depreciation. The expansion in gross margins was mainly due to better employee pyramid. In Q3 FY16 there was a net reduction of 100 in the total headcount, whereas we added 304 fresh graduates during the quarter. The realized rate for the quarter was Rs.65.95 v/s Rs.65.20 in Q2. The positive impact of the rupee depreciation on EBITDA margins was around 30 bps