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Mid-tier IT player KPIT Cummins' stock has been highly resilient over the past one year. The company has had an impressive run in growing both its revenues as well as net profits at a robust pace over the past couple of years. It was aided in this process by the acquisitions made over the past couple of fiscals, which have played out well.
In the first half of FY12, KPIT saw its revenues rise by 50.8 per cent over the same period last fiscal to Rs 641.1 crore, while net profits increased by 40.5 per cent to Rs 60.6 crore.
The company derives more than two-thirds of its revenues from the automotives, transportation and manufacturing verticals. This segment has been growing at a healthy pace.
What is even more desirable for KPIT is that high-margin services such as SAP implementation are also seeing steady traction. Because of the inorganic path that the company took for penetration in this (SAP) segment, it has been able to win some $10-million plus deals in the manufacturing and automotive industries.
In the recent September quarter, KPIT has signed three large deals worth $100 million totally. Debtor days too have reduced significantly over the last quarter from 71 days to 66 days currently.
On the flip side, the company's onsite component of revenues has gone up in recent times, and could increase costs.
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