KPIT Cummins Infosystems Ltd: SELL

KPIT Cummins Infosystems Ltd

CMP Rs127, SELL

Target price Rs126, Upside (0.8)%

We met the management of KPIT Cummins Infosystems Ltd to get an update on the recent business developments and growth outlook. Though the going has been good for the company in the recent rough times, we are getting a sense that KPIT might actually struggle to meet its earnings guidance for the year given the headwinds to margins. This can be a big negative for the stock, which has gone up sharply by 27% in the last three trading days. At CMP Rs127, valuations have become expensive on relative basis. We tweak our estimates and downgrade KPIT to short-term SELL with a March 2008 price target of Rs126 implying no upside from current levels.

Click below for the key takeaways of our interaction with company.

http://www.indiainfoline.com/adserver/InverstorReport_KPIT041207.asp

Warm Regards,

India Infoline Research Team

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