There’s been no bulk deals going the other way for those 14 lakhs. Back when I was tracking kpit around 40 to 60 the volumes were really low. Of late the volumes have been huge. After the huge 200 percent plus run-up there was enough liquidity to purchase from the open market due to people profit booking , shorters coming in etc. So I believe they took advantage of this and just purchased from the open market. Almost 30 lakh shares were traded today for eg. When I went to initiate a tracking position at 60 rs it took all day for my 100 shares to execute at market price since the liquidity was so low lol. So if anyone wanted to purchase 14 lakh shares the last few days was the best time to do so. The interest from institutions seem to be through the roof since start of last week
My takeaways after reading AR of 19,20
Impact Automotive(2019) : Investment / Created 133 Cr
Loan 11 Cr
Merging Impact back in 2019
Loan to KPIT UK(2020):50Cr
Vayavya acquisition 2019 can be synergized with KSAR
[This could be very big growth driver in Coming years, With this it will be comparable with Electrobit]
All subsidariaes performing well and profit generating barring germany and Brazil.
Though in case of German subsidiary turnover increased by 7 times.
Promoters are increasing stake in the company
Total managerial remuneration is less than 5% of the Profit for the year
Financial liabilities decrease significantly. Lease liabilities to watch out for
Dependency of Foreign currency fluctuation on operating margin decreased from 3.2% to 1%
Attrition rate decreased from 17 to 15%
Disclaimer: I am an Automotive Engineer and know bit of things about KPIT
I think people are on the lookout for small/mid cap software companies. There has been significant increase in the volumes/prices of small/midcap companies like Tata elxi, Ramco Systems, Birla Soft, Persistent etc.
Any views on kpit results for this quarter
Ankit - Thanks for sharing the details. Can you please elaborate on the Vayavya acquisition and why it could be big growth driver ? Thanks !
Any Software specially in Automotive can be be divided in 3 layers: Application,Middleware and lower layer. Lower layer deals with HW/Processor/Peripherals. KPIT have a tool for Middleware known as “KSAR” for AUTOSAR based Middleware and This tool is quite mature now in market. But KPIT never had a tool for lower layer. I checked Vyavya labs website they claim to have developed tool for lower ,i don’t have response of the tool from Market. Now thing is If you have Middleware as well as Lower layer tool you can offer better deal and it is efficient from both sides from development time point of view. or in simple words if Both of these tool reach mature stage KPIT can become one stop shop for System developers.
I hope i was some help.
Since it’s been a few days and it’s not been posted here are the results
H1 was exactly as management said so I’m not sure why market has dropped the price from recent Highs… They are still bullish on H2. Balance sheet looks healthy, operating margins have improved and order book looks good. They haven’t had a concall or more commentary as far as I know but if anyone has more info please share…thanks
I am comfortable with the results. Even i am searching for the negative information causing the fall.
Disclosure: Invested 5% of portfolio for long term
JATO Dynamics’ global analyst, Felipe Munoz, says the shift to electrification is “finally taking place”.
“Although this is largely down to government policies and incentives, consumers are now ready to adopt these new technologies” he continued.
Electrified car sales overtake diesels in Europe for first time
This trend is accelerating since mid-last year.
Disc: Invested
Vyavya lab acquisition is off as of now.
Coupled with Recent surge in Corona cases in Europe might be the reason of recent fall.
Long term prospect remain intact. Good thing is Indian Automakers reporting soothing numbers
KPIT announced new order from BMW on EV charging today. Analysts are expecting slight decline in revenue in 2HFY21, and 14% revenue growth in FY22. Question is if KPIT can start growing over 20% and achieve 16-18% EBITDA margin soon
good article from CEO Kishore Patil
KPIT Technologies has signed a large-scale order with BMW Group for the next generation charging electronics program. MicroFuzzy, A KPIT group company, a specialist in vehicle electrification engineering along with KPIT’s electric powertrain team will be at the forefront of executing this strategic software program and represents the first step for the BMW Group in establishing strategic software development partners for automotive software.
As part of the strategic collaboration, KPIT has been nominated as the single source software integration partner for the next generation 11KW combined charging electronics program powering the upcoming BEV’s of BMW Group. MicroFuzzy and KPIT will perform the role of a strategic software partner and will be responsible for complete development, integration, validation and series software maintenance, to accelerate the technologies a future electric vehicle requires.
KPIT is a global technology company with software solutions that will help mobility leapfrog towards an autonomous, clean, smart and connected future.
Hi,
KPIT has very high value for depreciation compared to tata elexi. Being a software driven company it should actually be small value. Management in last concall has mentioned a reduction in depreciation values in coming quarters and attributes this value to leasing. Can anybody provide some insight on this leasing charge ?
Its one of the things I’m keeping an eye on this quarter. Keeping a close eye on two things with kpit. Margins and depreciation. If margins improve and depreciation drops can see a huge re rating here. Their sales are already higher than the likes of Tata elxsi so sales aren’t an issue but they just haven’t been able to control their expenses(though margins have improved to 14 percent ). Until then just waiting and watching. Hopefully the Q3 result and commentary on Friday gives some insights on this. Management promised a much improved H2 regards sales and margins (and lower depreciation). Could be a breakout H2 if their sales are as high as they claim it could be and margins break through 16 percent. personally hoping for operating profits around 90 and EPS of just under 2 for Q3(though analysts do not expect this)
Disc: invested at much lower levels and sold post the run up and now have only a tracking position. Waiting to see if management really do walk the talk or if the problem of overpromising from a few years ago continues.
Since this year Travel was restricted they would be saving a lot on that front. Most of job work is supported from India.
On a premilinary analysis looks like there is some improvement in OPM and 5% drop in depreciation. Better revenues expected in Q4 with margin improvement and further drop in depreciation. But the rate of decrease in depreciation is very low and to bring it down to Tata elexi levels will take many years at this rate (Tata elexi 11 crore, KPIT 33cr)
What is actually contributing to this big depreciation ? Read somwhere that it is the lease amount, Can anyone throw more light on what this leasing expense is.
Tata elexi depreciation value is around 11 crore and remains almost constant.
Lease expense is due to Early termination of contract at some facilities to consolidate operations at one place along with WFH, keeping Covid in mind.