KPIT Technologies shares rebound 115% from 52-week low; buy, sell or hold?

Shares of KPIT Technologies Ltd have recovered 115% from the 52-week low of Rs 545.70 touched on September 7, 2022. KPIT Technologies shares closed at Rs 1174.70 in the previous session, rising 1.68% on BSE.  In almost a year, Sensex has risen 8.89 per cent during the period. The stock touched an all-time high of Rs 1200 on August 23, 2023. It has lost 2.1% from its record high in nearly seven days. 

In Thursday’s session, the KPIT Technologies stock rose 2.32% to an intraday high of Rs 1181.75 on BSE.  A total of 0.21 lakh shares of the firm changed hands amounting to a turnover of Rs 2.44 crore on BSE. Market cap of KPIT Technologies rose to Rs 32,195 crore on Thursday.    

In a year, the stock has gained 109 per cent and risen 68.59 per cent this year.   

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In terms of technicals, the relative strength index (RSI) of KPIT Technologies stands at 61.6, signaling the stock is trading neither in the overbought nor in the oversold zone. The stock has a beta of 0.6 in the last one year, indicating very low volatility. KPIT Technologies shares are trading higher than the 10 day, 20 day, 50 day, 100 day and 200 day moving averages.        

The rally in the stock can be attributed to strong earnings of the firm.    

Financial Performance    

KPIT Technologies logged a 56 percent year-on-year rise in net profit to Rs 134.43 crore for the first quarter ended June 30 against Rs 85.4 crore in the corresponding quarter of the previous fiscal. Sequentially, consolidated net profit climbed 20% from Rs 111.6 crore in Q4FY23.   

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Consolidated revenue from operations climbed nearly 60% on year to Rs 1,097.6 crores in Q1 from Rs 685.7 crore in Q1FY23. Sequentially, revenue climbed 7.9%. Total income rose to Rs 1,119.1 crore in the first quarter against Rs 701. 6 crore in the year-ago period.  

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KPIT Technologies reported a 7.2% rise in net profit for the quarter ended March 2023 on a quarter-on-quarter basis. On a year-on-year basis, net profit rose 38.60% to Rs 111.58 crore. On an annual basis, revenue zoomed 39% to Rs 3365 crore in FY23 against Rs 2432.38 crore in the previous fiscal. Net profit rose 40% to Rs 386.86 crore in FY23 against Rs 276.24 crore in FY22.    

The IT firm logged a consolidated net profit of Rs 104 crore in the December 2022 quarter (Q3 FY23), up 48 per cent from Rs 70.3 crore in the same quarter a year ago. The company's revenue from operations rose to Rs 917.11 crore in Q3 FY23, a year-on-year (YoY) growth of 47 per cent from Rs 622.36 crore in Q3 FY22.    

Sales climbed 47.36% to Rs 917.92 crore in the last quarter against Rs 622.37 crore in the corresponding quarter of the previous fiscal.  EBITDA rose 45.19% to Rs 166.94 crore in the December quarter against Rs 114.98 crore in the corresponding quarter of the previous fiscal.    

In the second quarter of the last fiscal, the firm, reported a profit of Rs 83.48 crore against Rs 65.10 crore in Q2 of FY22.  Revenue from operations rose to Rs 744.crore in Q2 compared to Rs 590.87 crore in the corresponding period of last fiscal.    

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Net profit rose 39% to Rs 381 crore in the fiscal ended March 2023 against Rs 274.23 crore in the March 2022 fiscal. Sales climbed 37.46% to Rs 3405 crore in the last fiscal against Rs 2477.15 crore in the March 2022 fiscal.    

Here’s a look at the outlook of the stock.   

Abhijeet from Tips2trades said, "KPIT Technologies is sideways to bearish on the daily charts with strong resistance zone at Rs 1160-1200. A daily close below the support of Rs 1094 could lead to a target of Rs 992 in the near term."  

Geojit has a hold call on the KPIT Tech stock with a target of Rs 1,231.   

"We expect revenue and PAT CAGR to grow by 27% and 34% over FY23-FY25E , respectively,  on  the back of deal wins and pricing benefits. Despite strong  fundamentals, we  expect H2 growth  to be conservative and  believe there  will be  some consolidation  in valuation. We value KPIT at 45 times FY25E EPS and maintain our Hold rating," said the brokerage.   

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has given a strong rally and made a high of Rs 1200 level. Now, it is in a consolidation phase and trading above the 50 EMA. The RSI is also flat and there is a strong support at the Rs 1086 level of the upwardly sloping trend line." 

About KPIT Technologies     

KPIT Technologies Limited is a technology company, which is focused on automobile engineering and mobility solutions. The company offers electronic and mechanical engineering solutions to its customers. It also analyses data for diagnostics, maintenance and tracking of assets and related connectivity solutions, including data and analytics beyond embedded or mechanical engineering and their connectivity and integration with back-end information technology (IT) systems and platforms for the automobile and mobility sector.    

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