2QFY2012 Result Update | IT

October 20, 2011

KPIT
Performance Highlights
(` cr) Net revenue EBITDA EBITDA margin (%) PAT
Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (qoq) 2.8 11.7 108bp 39.6 2QFY11 235 36 15.5 24 % chg (yoy) 38.3 21.7 (187)bp 41.4

`162 -

2QFY12 325 44 13.6 34

1QFY12 316 40 12.6 24

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

IT 1,276 0.9 199/114 98,585 2 16,937 5,092 KPIT.BO KPIT@IN

For 2QFY2012, KPIT Cummins Infosystems (KPIT) reported lower-than-expected performance. The company has transferred its diversified financial services (DFS) business to Intrasoft Technologies, as it was not the focus area of the company and was having just 2-3 clients. For FY2012, management maintained its USD revenue guidance of US$275mn-285mn i.e., 23-27% yoy growth. We recommend a Neutral rating the stock. Quarterly highlights: For 2QFY2012, KPIT reported revenue of US$70.1mn, up merely 0.4% qoq, majorly led by 5.0% volume growth. Excluding revenue from the DFS business, on a like-to-like basis, revenue came in at US$70.16mn vs. US$67.08 in 1QFY2012, up 4.6% qoq. In INR terms, revenue came in at `325cr, up 2.8% qoq. The companys EBITDA margin improved by 108bp qoq to 13.6% due to qoq INR depreciation against USD. PAT stood at `34cr, aided by higher other income, which includes net income of `2.3 from the transaction related to DFS carried out during the quarter. Outlook and valuation: KPITs management has guided for 23-27% yoy revenue growth for FY2012 (excluding ~US$9mn due to Systime). Although the company is growing ahead of other IT companies in terms of its revenue, on the operating front it is standing muted since the last few quarters. Also, the companys focus on the manufacturing vertical makes us slightly cautious on its FY2013 growth outlook, if any slowdown kicks in developed economies. Hence, we expect the companys revenue to post a CAGR of 24.7% and 25.2% in USD and INR terms, respectively, over FY2011-13E. On the EBITDA and PAT fronts, the company is expected to post a 26.4% and 24.9% CAGR over FY2011-13E. We value the company at 10x FY2013E EPS of `16.3, which gives us a target price of `163. We recommend a Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 26.7 16.7 22.2 34.4

Abs. (%) Sensex KPIT Cummins

3m (15.1)

1yr 0.6

3yr 65.7 483.2

(8.5) (14.8)

Key financials (Consolidated)

Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2009 793 32.1 66 28.6 23.1 8.4 19.2 7.8 40.4 48.5 1.6 6.9

FY2010 732 (7.8) 86 30.3 22.1 10.8 14.9 3.3 22.2 26.0 1.8 8.2

FY2011 1,007 37.6 95 10.6 15.1 11.4 14.2 2.2 15.7 15.4 1.2 8.0

FY2012E 1,372 36.4 129 35.5 14.8 14.1 11.4 1.8 17.7 18.9 0.9 6.3

FY2013E 1,578 14.9 148 15.1 15.4 16.3 9.9 1.5 17.1 18.6 0.8 5.0

Srishti Anand
022-3935 7800 Ext: 6820 srishti.anand@angelbroking.com

Ankita Somani
022-3935 7800 Ext: 6819 ankita.somani@angelbroking.com

Please refer to important disclosures at the end of this report

KPIT Cummins Infosystems | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance (Consolidated)

Y/E March (` cr) Net revenue Cost of revenue Gross profit SGA expenses EBITDA Depreciation EBIT Interest expense Other income PBT Income tax PAT Minority interest Final PAT EPS (`) EBITDA margin (%) EBIT margin (%) PAT margin (%)
Source: Company, Angel Research

2QFY12 325 213 112 67 44 12 33 1 11 43 9 34 0 34 4.0 13.6 10.1 10.0

1QFY12 316 212 104 64 40 9 30 1 2 31 7 24 0 24 2.7 12.6 9.6 7.6

% chg (qoq) 2.8 0.4 7.8 5.3 11.7 22.4 8.3 24.2 35.0 23.7 38.3 39.6 51.0 108bp 51bp 244bp

2QFY11 235 151 84 48 36 8 28 0 (1) 27 3 24 24 2.9 15.5 12.0 10.1

% chg (yoy) 38.3 41.2 33.1 41.9 21.7 38.2 16.8 318.6 56.3 157.3 41.9 41.4 38.0 (187)bp (186)bp (14)bp

1HFY12 641 426 216 131 84 21 63 2 13 74 16 58 0 58 6.7 13.1 9.8 8.8

1HFY11 436 276 159 89 70 16 54 2 (3) 49 6 43 43 5.3 16.2 12.4 10.0

% chg (yoy) 47.2 54.2 35.1 47.5 19.4 27.9 16.9 33.0 49.6 151.2 34.7 33.7 26.3 (305)bp (256)bp (115)bp

Exhibit 2: Actual vs. Angel estimates

(` cr) Net revenue EBITDA margin (%) PAT
Source: Company, Angel Research

Estimate 324 15.1 28

Actual 325 13.6 34

% Var 0.5 (147)bp 19.3

Modest revenue growth

For 2QFY2012, KPIT reported revenue of US$70.1mn, up merely 0.4% qoq, majorly led by 5.0% volume growth. The company has transferred its business from the DFS vertical to Intrasoft Technologies; so on like-to-like basis, revenue came in at US$70.16mn vs. US$67.08 in 1QFY2012, up 4.6% qoq. The financial services vertical contributed 0.3% to the companys overall revenue in 2QFY2012 (US$0.2mn) vs. 4.3% in 1QFY2012 (US$3.01mn); so on a qoq basis, revenue from DFS declined by 93% qoq, which was a major dragger of the companys overall performance. KPIT had only 2-3 clients in its DFS vertical and the company was doing only maintenance work for DFS clients, as it is not a focus vertical for KPIT. In INR terms, revenue came in at `325cr, up 2.8% qoq. On a like-to-like basis, INR revenue came in at `324cr in 2QFY2012 vs. `303cr in 1QFY2012, up 7.1% qoq. Revenue from Cummins account grew significantly by 12.5% qoq and contributed 22.6% to the companys revenue in 2QFY2012.

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

Exhibit 3: Trend in volume and revenue growth (qoq)

20 15.8 15 10.6 19.0

(%)

10 9.5 5 7.6 8.5

7.0 5.0 4.0 0.4 2QFY12

0 2QFY11 3QFY11 Volume growth

Source: Company, Angel Research

4QFY11

1QFY12

Revenue growth (USD terms)

KPITs revenue performance came on the back of modest growth across all its major strategic business units (SBUs). IES records decent growth: The integrated enterprise solutions (IES) SBU (contributed 38.5% to revenue) reported a 5.5% qoq decline in revenue because DFS revenue of which declined substantially qoq was a part of IES SBU. On a like-to-like basis, revenue from IES SBU grew by 4.5% qoq. The company is witnessing increasing traction for Oracle offerings in the US market, mainly for transformational deals. Also, KPITs focus on supply-chain management and logistics through value-chain planning, oracle transportation management (OTM), manufacturing execution system, enterprise software support and consulting helped it to retain its continuous growth momentum. Going ahead, with the integration of Systime (acquired in May 2011), the combined Oracle practice is expected to reach US$125mn-150mn by FY2013. Auto and engineering SBU continues its momentum: The auto and engineering SBU (contributed 27.6% to revenue) posted 6.8% qoq growth in revenue, with revenue coming at US$19.4mn. In this SBU, demand for practices such as power train, infotainment, mechanical engineering and design services, in-vehicle networks and hybrid technologies was spread across geographies. Acquisition of In2Soft GmbH further aided the SBUs revenue. KPIT is looking to increase the share of non-liner revenue (IP-led revenue) in this SBU to improve the quality of revenue as well as assist in improving margins; and as part of its effort to increase non-linear revenue, KPIT has entered into an engagement with a Japanese tier-I company for AUTOSAR license sale for its new vehicle program. SAP maintains its growth trajectory: The SAP SBU (contributed 30.6% to revenue) registered 7.9% qoq growth in its revenue to US$21.5mn. KPIT has a strong order pipeline in this SBU for solutions and services in areas such as core ERP, business intelligence, customer relationship management and application maintenance and support, mainly from the US. Management indicated that it is making investments to capture volumes in the SAP SME business and has got its first engagement in this space.

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

SSG leads growth: The semiconductor solutions group (SSG) SBU (contributed 3.3% to revenue) registered 39.5% qoq growth in its revenue to US$2.4mn. Further, KPIT is now focusing on improving the volume of business from SSG customers by practices such as analog mixed signal, semiconductor multimarket embedded solutions and system on chip.

Exhibit 4: Revenue growth (SBU wise)

SBU Integrated enterprise solutions Auto and engineering SAP SSG
Source: Company, Angel Research

% of revenue 38.5 27.6 30.6 3.3

% growth (qoq) (5.5) 6.8 7.9 39.5

% growth (yoy) 54.2 53.1 36.9 (11.6)

The companys anchor vertical, automotive, transportation and manufacturing (ATM) (contributed 66.4% to revenue) registered strong revenue growth of 9.1% qoq during the quarter. The company is witnessing modest traction in this vertical as automobile companies try to improve efficiency, safety and comfort as well as due to regulatory standards. Also, rise in demand for smaller vehicles, especially in India and China, is also one of the drivers of the building deal pipeline of this vertical. In the energy and utilities vertical, IT spend is coming from areas such as customer information systems and business analytics.

Exhibit 5: Revenue growth (Vertical wise)

Service verticals ATM Energy and utilities Defense and government Others
Source: Company, Angel Research

% of revenue 66.4 10.0 2.2 21.4

% growth (qoq) 9.1 (14.3) 6.5 (5.6)

% growth (yoy) 40.1 40.9 693.3 49.3

Geography wise, revenue from the US grew by 9.2% qoq. However, revenue from Europe and emerging markets (rest of the world) declined by 1.7% and 18.4% qoq, respectively. The decline in revenue from emerging markets is largely because of variations in fixed price contracts; as such, there are no delays or cancellations of any projects. The company is planning its footprint in the Brazilian market as its largest client, Cummins is increasing its business in Brazil, which will give KPIT a good business opportunity to increase its revenue traction from Cummins.

Exhibit 6: Revenue growth (Geography wise)

Geography US Europe Rest of the World
Source: Company, Angel Research

% of revenue 68.1 20.1 11.8

% growth (qoq) 9.2 (1.7) (18.4)

% growth (yoy) 48.0 42.2 31.7

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

Hiring momentum takes a break

During the quarter, KPITs total employee base reduced by 40 employees to 6,544. This was because of transfer of the DFS business, which also led to transfer of employees who were part of that business. However, excluding that, the company added 160 net employees. Management indicated that going ahead also lateral hiring will be limited to need-based and focus will be on hiring of freshers to improve the employee pyramid and rationalize employee costs.

Exhibit 7: Employee addition

Particulars Net addition Development Sales and support Total Total employees Development Sales and support Total 5,474 479 5,953 5,743 486 6,229 5,998 516 6,514 6,063 521 6,584 6,018 526 6,544 579 30 609 269 7 276 255 30 285 65 5 70 (45) 5 (40) 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Offshore as well as onsite utilization increased by 158bp and 54bp qoq to 72.81% and 91.26%, respectively, during the quarter. The company is targeting to improve its utilization level, onsite and offshore, to 75% and 93% in the coming quarters, respectively, which can act as an important lever to pull up its margins.

Exhibit 8: Trend in utilization

100 90 89.2 80 89.1 90.2 90.7

91.3

(%)
70 60 50 2QFY11 3QFY11
Onsite utilisation

67.9

67.6

69.9

71.2

72.8

4QFY11

1QFY12
Offshore utilisation

2QFY12

Source: Company, Angel Research

Margins expand
On the operational front, KPITs EBITDA margin increased by 108bp qoq (below expectations) to 13.6%, majorly aided by lower S&M expenses and qoq INR depreciation against USD. Going ahead, management expects FY2012 exit rate for the companys operating margin to be 15-16%.

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

Exhibit 9: Margin profile

45 35.7 35 34.4 36.7 32.8 34.4

(%)

25 15.5 15 12.0 2QFY11 14.1 14.6 12.6 9.6 1QFY12 13.6 10.1 2QFY12
EBIT margin

11.0 3QFY11
Gross margin

9.1 4QFY11
EBITDA margin

Source: Company, Angel Research

Client pyramid
KPIT added four new clients during 2QFY2012. The total active client base of the company stands at 163 as of 2QFY2012 against 159 in 1QFY2012. The companys revenue from its top client, Cummins, grew by 12.5% qoq in 2QFY2012. Management foresees an increase in IT and engineering spends coming in from the Cummins account in FY2012, as Cummins is making investments in future technologies and emerging markets. Revenue from the companys top 10 clients (excluding Cummins) grew by 8.9% qoq during the quarter.

Exhibit 10: Client metrics

(% of revenue) Top client-Cummins Top-10 client billing Repeat business (%) No. of customers added No. of active customers Customers with run rate >US$1mn
Source: Company, Angel Research

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 23.0 55.0 90+ 3 147 39 24.1 51.2 90+ 5 152 40 21.1 55.4 90+ 3 155 40 20.7 49.3 90+ 4 159 48 22.6 48.1 90+ 4 163 51

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

Outlook and valuation

KPITs management has guided for 23-27% yoy revenue growth for FY2012 (excluding ~US$9mn due to Systime) even on the back of strong 40% yoy organic growth recorded in FY2011 along with strengthening of the demand environment for discretionary spend. Although the company is growing ahead of other IT companies in terms of its revenue, on the operating front it is standing muted since the last few quarters even after managements repeated comments of trying to improve it. Also, the companys focus on the manufacturing vertical makes us slightly cautious on its FY2013 growth outlook, if any slowdown kicks in developed economies. Hence, we expect the companys revenue to post a CAGR of 24.7% and 25.2% in USD and INR terms, respectively, over FY2011-13E. On the EBITDA and PAT fronts, the company is expected to post a 26.4% and 24.9% CAGR over FY2011-13E. We value the company at 10x FY2013E EPS of `16.3, which gives us a target price of `163. Owing to the cautiousness related to companys revenue profile, we recommend a Neutral rating on the stock.

Exhibit 11: Key assumptions

FY2012 Revenue growth-USD terms (%) USD-INR rate Revenue growth-INR terms (%) EBITDA margin (%) Tax rate (%) EPS growth (%)
Source: Company, Angel Research

FY2013 16.4 46.0 14.9 15.4 24.0 15.5

33.6 46.6 36.4 14.8 22.8 24.5

Exhibit 12: Change in estimates

FY2012E Parameter (` cr) Net revenue EBITDA Other income PBT Tax PAT Earlier estimates 1,337 202 11 157 37 121 Revised estimates 1,372 204 15 160 37 128 2.0 (1.8) 5.7 Variation (%) 2.7 0.6 Earlier estimates 1,538 235 14 184 44 140 FY2013E Revised estimates 1,578 243 19 195 47 148 5.9 5.9 5.9 Variation (%) 2.6 3.4

Source: Company, Angel Research

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

Exhibit 13: One-year forward PE

400 300

(`)

200 100 0

Oct-05

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Price

26x

20x

14x

8x

2x

Source: Company, Angel Research

Exhibit 14: Recommendation summary

Company HCL Tech Hexaware Infosys Infotech Entp. KPIT Cummins Mahindra Satyam MindTree Mphasis NIIT^ Persistent TCS Tech Mahindra Wipro Reco. Buy Neutral Neutral Accumulate Neutral Accumulate Buy Buy Buy Accumulate Buy Buy Accumulate CMP (`) 415 89 2,746 111 162 70 383 323 48 312 1,045 570 355 Tgt. price (`) 545 127 79 462 382 61 330 1,220 734 374 Upside (%) 31.3 14.1 12.9 20.6 18.4 28.4 5.8 16.8 28.8 5.5 Target P/E (x) 14.0 11.0 18.0 8.5 10.0 11.0 10.0 11.5 8.8 9.0 20.0 9.0 15.3 FY2013 EBITDA (%) 17.7 16.8 30.6 15.7 15.4 14.6 14.4 15.5 13.8 20.0 28.7 16.3 18.3 FY2013E P/E (x) 10.7 10.9 17.4 7.5 9.9 9.8 8.4 8.2 6.9 8.5 17.1 7.0 14.5 FY2011-13E EPS CAGR (%) 26.1 68.7 14.8 8.9 19.9 30.4 35.6 0.4 11.2 2.5 17.0 28.5 6.1 FY2013E RoCE (%) 20.6 18.1 24.0 15.0 18.6 10.8 18.6 13.4 12.4 15.8 29.8 13.6 12.9 FY2013E RoE (%) 22.4 18.8 22.5 12.4 17.1 13.5 16.5 14.5 16.6 14.8 30.9 20.2 18.7

Source: Company, Angel Research; Note: ^Valued on SOTP basis

October 20, 2011

Oct-11

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

KPIT Cummins Infosystems | 2QFY2012 Result Update

Profit and Loss statement (Consolidated)

Y/E March (` cr) Net sales Cost of revenue % of net sales Gross profit % of net sales S&M expenses % of net sales G&A expenses % of net sales EBITDA % of net sales Depreciation EBIT Interest expense, net Other income, net Profit before tax Provision for tax % of PBT PAT Minority interest Exceptional item Adj. PAT EPS (`) FY2009 793 447 56.3 346 43.7 69 8.7 94 11.9 183 23.1 44 140 5 (57) 78 12 15.4 66 0 66 8.4 FY2010 732 409 55.9 323 44.1 66 9.1 95 13.0 161 22.1 31 131 3 (25) 103 17 16.5 86 86 10.8 FY2011 1,007 644 64.0 363 36.0 76 7.6 134 13.3 152 15.1 41 111 3 3 110 15 14.0 95 95 11.4 FY2012E 1,372 889 64.8 484 35.2 113 8.2 168 12.2 204 14.8 43 161 16 15 160 37 22.8 124 5 129 14.1 FY2013E 1,578 1,016 64.4 561 35.6 124 7.8 194 12.3 243 15.4 62 181 5 19 195 47 24.0 148 148 16.3

October 20, 2011

KPIT Cummins Infosystems | 2QFY2012 Result Update

Balance sheet (Consolidated)

Y/E March (` cr) Liabilities Share capital Application money ESOP outstanding Preferential shares Reserves and surplus Share premium Total shareholders funds Secured loans Unsecured loans Total debt Minority interest Deferred tax liability, net Total liabilities Assets Gross block - fixed assets Accumulated depreciation Net block Capital work-in-progress Goodwill Investments Current assets Sundry debtors Cash and bank balance Loans and advances Total current assets Less:- Current liabilities Sundry creditors Other liabilities Provisions Net current assets Total assets 85 186 10 108 288 64 43 23 181 503 118 38 32 385 720 127 30 48 373 852 145 30 55 456 973 178 167 45 390 139 105 68 312 253 210 110 572 271 156 151 577 311 201 174 686 220 104 116 35 28 0 251 128 124 29 95 75 294 169 125 33 130 48 422 211 211 45 150 74 472 274 198 69 150 100 16 147 163 118 118 6 288 16 0 2 370 387 111 111 5 503 16 0 2 458 128 603 111 111 6 720 16 0 2 2 579 128 726 121 121 5 852 16 0 2 2 720 128 867 101 101 5 973 FY2009 FY2010 FY2011 FY2012E FY2013E

October 20, 2011

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KPIT Cummins Infosystems | 2QFY2012 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Pretax profit from operations Depreciation Pre tax cash from operations Other income/prior period ad Net cash from operations Tax Cash profits (Inc)/dec in Current assets Current liabilities Net trade working capital Cash flow from operating activities (Inc)/dec in fixed assets (Inc)/dec in investments Inc/(dec) in deferred tax liability (Inc)/dec in intangibles Inc/(dec) in minority interest Cash flow from investing activities Inc/(dec) in debt Inc/(dec) in equity/premium Dividends Cash flow from financing activities Cash generated/(utilised) Cash at start of the year Cash at end of the year (26) 198 172 281 (27) (0) 2 (28) (0) (54) 32 (161) 5 (135) 93 74 167 16 (151) (135) (18) (32) (75) (1) (67) (0) (174) (8) 145 6 131 (62) 167 105 (156) 57 (99) 37 (47) 27 1 (35) (54) (0) 128 7 121 104 105 210 (59) 17 (42) 129 (140) (26) (1) (20) (187) 10 2 7 5 (54) 210 156 (63) 25 (38) 173 (74) (27) (100) (20) 7 (27) 46 156 201 FY2009 135 44 179 (57) 121 (12) 109 FY2010 128 31 159 (25) 133 (17) 117 FY2011 108 41 149 3 151 (15) 136 FY2012E 150 43 193 15 208 (37) 171 FY2013E 176 62 238 19 257 (47) 210

October 20, 2011

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KPIT Cummins Infosystems | 2QFY2012 Result Update

Key ratios
Y/E March Valuation ratio (x) P/E (on FDEPS) P/CEPS P/BVPS Dividend yield (%) EV/Sales EV/EBITDA EV/Total assets Per share data (`) EPS Cash EPS Dividend Book value Dupont analysis Tax retention ratio (PAT/PBT) Cost of debt (PBT/EBIT) EBIT margin (EBIT/Sales) Asset turnover ratio (Sales/Assets) Leverage ratio (Assets/Equity) Operating ROE Return ratios (%) RoCE (pre-tax) Angel RoIC RoE Turnover ratios (x) Asset turnover (fixed assets) Receivables days Payable days Working capital days 2.5 74 51 23 1.9 79 67 12 1.6 71 52 19 1.7 72 52 20 1.7 72 52 20 48.5 88.0 40.4 26.0 47.6 22.2 15.4 32.0 15.7 18.9 32.1 17.7 18.6 32.7 17.1 0.8 0.6 0.2 2.8 1.8 40.4 0.8 0.8 0.2 1.5 1.3 22.2 0.9 1.0 0.1 1.4 1.2 15.7 0.8 1.0 0.1 1.6 1.2 17.7 0.8 1.1 0.1 1.6 1.1 17.1 8.4 14.0 0.9 20.8 10.8 14.7 0.9 48.8 11.4 16.7 0.9 73.9 14.1 20.4 0.9 89.0 16.3 25.8 0.9 106.2 19.2 11.6 7.8 0.5 1.6 6.9 4.4 14.9 11.0 3.3 0.5 1.8 8.2 2.6 14.2 9.7 2.2 0.5 1.2 8.0 1.7 11.4 7.9 1.8 0.5 0.9 6.3 1.5 9.9 6.3 1.5 0.5 0.8 5.0 1.3 FY2009 FY2010 FY2011 FY2012E FY2013E

October 20, 2011

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KPIT Cummins Infosystems | 2QFY2012 Result Update

Research Team Tel: 022 - 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

KPIT Cummins No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 20, 2011

13