Rs 94 to Rs 410: This multibagger stock zoomed over 300% in one year; do you own it?
In the past one year, the share price jumped from Rs 94.5 to Rs 410.45, logging around 334 per cent return in this period.
- Nov 10, 2021,
- Updated Nov 10, 2021 5:10 PM IST
Shares of KPIT Technologies Limited have delivered more than 300 per cent return to its shareholders in the last one year. The stock rose 10 per cent to hit an all-time high of Rs 410.45 on the Bombay Stock Exchange (BSE) on Wednesday amid heavy volumes.
It has been gaining for the last seven days and has risen 30 per cent during the same period. In the past one year, the share price jumped from Rs 94.5 to Rs 410.45, logging around 334 per cent return in this period.
An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 21.7 lakh today.
The scrip has jumped around 182 per cent since the beginning of this year. With a market capitalisation of more than Rs 11,000 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
KPIT Tech reported a profit of Rs 65 crore for the quarter ended September 2021 as against a net profit of Rs 27.8 crore in the year-ago quarter. The company's net revenue rose 22 per cent to Rs 590.87 crore during the quarter.
The company informed that the sequential net profit growth was aided by higher operating margins, in-line depreciation and a higher yield on cash though the other income, was lower due to unfavorable currency movements.
In its investor presentation, the company stated that the revenue growth momentum will continue in H2FY22. The growth is expected to be broad-based across practices and clients.
"We have a healthy order book and decent medium-term visibility, giving us the confidence of 18% -20% growth for FY22," it said.
According to a report by Anand Rathi, the key variable to track KPIT's performance is margin expansion as it benefits from greater offshore and higher utilisation. The brokerage firm expects the FY23 EBITDA margin (17.8 per cent) to surpass FY20's 13.7 per cent, FY21's 15.2 per cent and FY22's 17.5 per cent. The stock has already crossed the target price of Rs 400 per share.
"In Q2, growth came from all regions. Both, the US and Europe grew ~20 per cent y/y, suggesting broad-based demand for KPIT's engineering services. Both the regions have also seen steady growth in the last two quarters," it noted.
"The stock quotes at 27x FY23e EPS of Rs 11.8, which we find attractive considering a 50 per cent EBIT CAGR over FY21-23. The company should deliver higher margins in the future, besides good growth. Its dollar revenue slid 10 per cent in FY21 but should return to 20.7 per cent growth in FY22 (FY22 revenue is up 9 per cent from FY20) and 16 per cent growth in FY23," it added.
According to MarketsMojo, the company has a low debt to equity ratio (avg) at -0.25 times and has declared positive results for the last 3 consecutive quarters.
The technical trend has improved from 'Mildly Bullish' on November 9, 2021, and the stock is technically in a 'Bullish' range now. The stock is also trading at a discount compared to its average historical valuations and with a Return on Equity (ROE) of 17.1, it has a 'Fair' valuation.
Shares of KPIT Technologies Limited have delivered more than 300 per cent return to its shareholders in the last one year. The stock rose 10 per cent to hit an all-time high of Rs 410.45 on the Bombay Stock Exchange (BSE) on Wednesday amid heavy volumes.
It has been gaining for the last seven days and has risen 30 per cent during the same period. In the past one year, the share price jumped from Rs 94.5 to Rs 410.45, logging around 334 per cent return in this period.
An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 21.7 lakh today.
The scrip has jumped around 182 per cent since the beginning of this year. With a market capitalisation of more than Rs 11,000 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
KPIT Tech reported a profit of Rs 65 crore for the quarter ended September 2021 as against a net profit of Rs 27.8 crore in the year-ago quarter. The company's net revenue rose 22 per cent to Rs 590.87 crore during the quarter.
The company informed that the sequential net profit growth was aided by higher operating margins, in-line depreciation and a higher yield on cash though the other income, was lower due to unfavorable currency movements.
In its investor presentation, the company stated that the revenue growth momentum will continue in H2FY22. The growth is expected to be broad-based across practices and clients.
"We have a healthy order book and decent medium-term visibility, giving us the confidence of 18% -20% growth for FY22," it said.
According to a report by Anand Rathi, the key variable to track KPIT's performance is margin expansion as it benefits from greater offshore and higher utilisation. The brokerage firm expects the FY23 EBITDA margin (17.8 per cent) to surpass FY20's 13.7 per cent, FY21's 15.2 per cent and FY22's 17.5 per cent. The stock has already crossed the target price of Rs 400 per share.
"In Q2, growth came from all regions. Both, the US and Europe grew ~20 per cent y/y, suggesting broad-based demand for KPIT's engineering services. Both the regions have also seen steady growth in the last two quarters," it noted.
"The stock quotes at 27x FY23e EPS of Rs 11.8, which we find attractive considering a 50 per cent EBIT CAGR over FY21-23. The company should deliver higher margins in the future, besides good growth. Its dollar revenue slid 10 per cent in FY21 but should return to 20.7 per cent growth in FY22 (FY22 revenue is up 9 per cent from FY20) and 16 per cent growth in FY23," it added.
According to MarketsMojo, the company has a low debt to equity ratio (avg) at -0.25 times and has declared positive results for the last 3 consecutive quarters.
The technical trend has improved from 'Mildly Bullish' on November 9, 2021, and the stock is technically in a 'Bullish' range now. The stock is also trading at a discount compared to its average historical valuations and with a Return on Equity (ROE) of 17.1, it has a 'Fair' valuation.