KPIT Tech's stock slips 14% on profit and growth warning

Firm said its revenues will be flattish for first two quarters of FY17 due to internal revamp and external changes in business environment

Pune-based IT solutions and products firm KPIT Technologies stock plummeted by over 14 per cent, as the company warned of a flattish growth in profit and topline for the first half of FY17.

The company's stock touched a low of Rs 157.50, and fell 14.36 per cent.

In a statement to the Bombay Stock Exchange the company said that its revenues will be flattish for the first two quarters of the year due to internal restructuring as well as external changes in the business environment.

"The company's traditional revenue from ERP implementations are affected more than anticipated earlier, whereas there is good traction in the newer areas of cloud and digital technologies. As a result, the company expects a drop in revenue of around 4 per cent on the first quarter with a consequent drop in profitability. We anticipate the revenues and profits to be flattish in the second quarter over first quarter," said the statement.

KPIT Technologies had announced in the fourth quarter (ended March 31, 2016) that the company is undergoing restructuring. The company had stated that they will focus on profitability, predictability, people and then growth along with a vertical focused strategy.

KPIT continues to focus on two industries-manufacturing and energy-these are now being further broken into specifics.

Other than automotive and transportation, the manufacturing vertical has been divided into three segments-industrial & consumer products, hi tech and life sciences. Along with verticals like energy & resources and utilites.

For FY16 the company reported revenue of Rs 3,224 crore up 7.8 per cent year-on-year and net profit of Rs 281 crore representing a growth of 18.8 per cent.