KPIT Technologies zooms 8% as margins expand 150 bps YoY in Q4

Shares of KPIT Technologies zoomed nearly 8 per cent to Rs 209 apiece on the BSE on Thursday after the company posted better-than-expected March quarter results. The Pune-based IT services firm reported net profit of Rs 47 crore for the fourth quarter ended March 31, 2021, up 23.6 per cent year-on-year. Sequentially, profits were up 9.3 per cent. 

The company reported operating margin expansion by 150 basis points YoY due to improvement in utilisation, offshore revenues and other cost-saving measures. Margins expanded from 13.5 per cent reported in the previous year. The company is targeting to keep the operating profit margin at 16-17 per cent level in FY22, the management said in a statement.

"We have delivered consecutive quarters of good growth and margin expansion. KPIT teams, globally, have done an exceptional job on delivering these numbers. We are assertive of the growth trajectory and feel fairly confident of delivering double digit growth in FY22. We continue to focus on people development, operational efficiency and productivity improvement," said Kishor Patil, Co-founder, CEO and MD at KPIT.

The company said that the revenue growth momentum will continue in FY22. "The growth is expected to be broad based across practices and clients. We have a healthy order book and decent medium-term visibility, giving them confidence of double-digit growth in FY22," it added.

FY22 will see wage hikes, impact of new wage bill, fresher additions, higher operating costs & frontend investments. The company said offshoring, productivity improvement, employee pyramid and fixed cost leverage will help us neutralize & better cost increases.