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KPIT Technologies Q3 earnings today: Here’s what to expect

KPIT Technologies will report its third-quarter earnings on Tuesday and the company is likely to see margin expansion for the sixth straight quarter.

By Reema Tendulkar Jan 15, 2019 12:08:25 PM IST (Updated)

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KPIT Technologies will report its third-quarter earnings on Tuesday and the company is likely to see margin expansion for the sixth straight quarter.

The momentum will be soft this quarter on account of seasonality as well as corporate action around the demerger and so we are working with a dollar revenue growth of 0.9 percent on a quarter-on-quarter (QoQ) basis. Constant currency growth should be about 1.5 percent.

Margin expansion is likely to continue for the sixth straight quarter. So we are working with margins of 13.8 percent aided by efficiencies as well as the INR depreciation. This margin improvement at KPIT Technologies has been a heartening feature – from a low of 9.1 percent in Q1 of FY18, we have seen margins expand to over 13.5 percent.

Profits, despite the margin expansion, will be under pressure on the back of higher tax rate and possible forex loss.

The key will be the FY19 guidance. Currently the company has guided for 8-10 percent revenue growth. In the first half of the year, the company has reported a growth of 9.8 percent, but Q3 and Q4 are typically soft. So the company is likely to hold on to it.

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