June 15 (Bloomberg) -- KPIT Cummins Infosystems Ltd. will spend 2 billion rupees ($44.7 million) in the next three years to buy shares it doesn’t own in Mumbai-based Systime, which installs and manages software made by Oracle Corp.
KPIT Cummins last month paid 1 billion rupees to acquire 50 percent of Systime. The Pune, India-based software developer will use its own funds to raise stake in Systime, Chairman Ravi Pandit said in a phone interview.
The acquisition helped KPIT Cummins expand into providing software solutions and add clients such as BP Plc, Burmah Castrol Plc, and Exxon Mobil Corp., Ankita Somani, an analyst at Angel Broking Ltd., wrote in a May 27 report. The purchase will increase KPIT Cummins’s earnings-per-share from the year beginning April 2012, wrote Somani, who recommends investors buy the shares.
Software such as anti-skid braking systems for cars and for customers in the energy and utilities industry are boosting growth, Pandit said. “The third area that is driving growth is emerging markets like India and China,” he said.
KPIT Cummins fell 0.9 percent to 170.05 rupees at the 3:30 p.m. close in Mumbai. The shares have risen 17 percent this year, compared with a 12 percent drop in the Bombay Stock Exchange’s benchmark Sensitive Index.
The company increased prices for clients by as much as 7.5 percent, Pandit said. Net income is forecast to increase by about 27 percent to $26.6 million on sales of $285 million in the year ending March 31, he said.
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