KPIT Technologies plunged 7% to Rs 162 on the BSE after consolidated net profit dropped 17% to Rs 51 crore on 2% decline in revenue to Rs 690 crore in Q1 June 2014 over the corresponding period last year.
The company's EBITDA margin plunged to 12% in Q1 June 2014, from 16% in the corresponding quarter previous year. The sharp decline in EBITDA margin was attributed to wage hikes effective from 1 April which had a negative impact of 240 basis points (bps) on the EBITDA margin during the quarter.
On a like to like basis the average wage hikes were 4%-5% onsite and 9%-11% offshore. Some corrections and promotions will additionally take effect from 1 July and 1 October. The net impact on operational margins due to this would be approximately 0.5% in Q2 and Q3, as stated on the BSE
The company expects sustained improvement in the operational profitability in the coming quarters aided by growth, utilization improvement and pyramid improvement.
The other income during the quarter stood at Rs 11 crore as against loss of Rs 18 crore in Q4 March 2014. Other income included forex gain of Rs 7 crore in Q1 June 2014 against a loss of Rs 24 crore in Q4 March 2014, KPIT Technologies added.
KPIT Technologies is a global IT consulting and product engineering company focused on co-innovating domain intensive technology solutions for corporations, specializing in automotive & transportation, manufacturing, and energy & utilities.
Shares of KPIT Technologies opened at Rs 168, touched a high of Rs 168 and a low of Rs 157 on the BSE. A total of 417,555 shares have been exchanged on the BSE so far.
