Revenue and Profit Growth
Over the past six years, KPIT Technologi. has seen its net sales surge from a modest base to a substantial figure exceeding ₹5,800 crores in the latest fiscal year. This represents a compound annual growth rate that underscores the company’s successful expansion and market penetration. The operating profit margin has also improved steadily, reaching nearly 21% recently, up from around 14% several years ago, signalling enhanced operational efficiency and cost control.
Profit after tax (PAT) has mirrored this upward trend, rising from just over ₹54 crores to more than ₹830 crores in the most recent year. This growth is further reflected in the earnings per share (EPS), which has increased from approximately ₹2.0 to nearly ₹31, indicating strong value creation for shareholders. The PAT margin has improved from under 9% to over 14%, highlighting the company’s ability to convert revenue into net earnings effectively.
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Cost Structure and Operating Efficiency
The company’s expenditure profile reveals a disciplined approach to managing costs. Employee costs, the largest expense category, have increased in line with revenue growth, reflecting investment in talent to support business expansion. Other expenses have also risen but at a controlled pace, contributing to the improvement in operating margins. Raw material costs remain minimal, consistent with KPIT’s service-oriented business model.
Interest expenses have been relatively low and declining in recent years, indicating reduced reliance on debt financing. Depreciation charges have increased, consistent with capital investments in fixed assets, which have more than doubled over the period, signalling ongoing capacity enhancement and infrastructure development.
Balance Sheet Strength and Asset Management
KPIT Technologi.’s balance sheet has strengthened considerably, with shareholder funds growing from around ₹1,200 crores to nearly ₹2,900 crores. The company has effectively reduced its long-term borrowings to zero in the latest fiscal year, reflecting a strong deleveraging trend. Total liabilities have increased in absolute terms but remain well supported by asset growth, with total assets rising from approximately ₹1,600 crores to nearly ₹5,000 crores.
Net block of fixed assets has expanded significantly, indicating sustained capital expenditure. Current assets have also grown robustly, supported by increases in cash and bank balances, sundry debtors, and current investments, which collectively enhance liquidity and working capital management. The company’s book value per share has nearly tripled, reinforcing its growing net worth and financial stability.
Cash Flow and Financial Health
Cash flow from operating activities has shown a strong upward trajectory, rising from under ₹400 crores to nearly ₹1,400 crores, reflecting improved profitability and efficient working capital management. Investing activities have consistently involved significant outflows, aligned with the company’s expansion and capital investment strategy. Financing activities have seen net outflows, consistent with debt reduction and prudent capital allocation.
Net cash inflow has increased steadily, contributing to a healthy cash and cash equivalents balance, which has grown from ₹275 crores to over ₹1,000 crores. This liquidity position provides KPIT Technologi. with a solid buffer to support ongoing operations and future growth initiatives.
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Summary of Historical Performance
In summary, KPIT Technologi. has exhibited a commendable historical performance marked by strong revenue growth, expanding profitability, and enhanced shareholder value. The company’s improving margins and disciplined cost management have supported rising net profits and EPS. Its balance sheet has become more robust with reduced debt and increased equity, while cash flow generation has strengthened, underpinning financial flexibility.
These factors collectively position KPIT Technologi. as a resilient player in the software and consulting sector, with a track record of consistent growth and sound financial health. Investors seeking exposure to this segment may find the company’s historical performance indicative of its potential for sustained value creation.
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