Revenue depends majorly on Auto segment which is cyclical. Hence the company’s earnings seem cyclical. Which is evident from the FY’15-FY21 flat earnings profile. So not being diversified well to counter the cyclicality aspect, I don’t think valuation wise it can be compared with the peers like Tata Elxsi & LTTS. Hence the valuation that its IPO demands i.e. the PE of 35 (approx) based on FY’23 earnings, seems to be overvalued.
Although KPIT seems comparable to Tata Tech on the ground of auto being major contributer, valuation wise KPIT is currently sky high. So I feel its better not to catch absurdity.
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