KPIT Tech shares dive 13% in two sessions; here's what analysts say

Shares of KPIT Technologies Ltd fell sharply for the second straight session in Wednesday's trade. The stock tanked 6.07 per cent to hit a day low of Rs 1,415. At this price, the scrip has declined 12.78 per cent in two days. Despite the mentioned fall, the multibagger counter has gained 106 per cent on a year-to-date (YTD) basis.

Technical analysts largely suggested that the stock looked 'bearish'. Immediate support could be seen at Rs 1,380, followed by Rs 1,365 level.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "KPIT Tech is primarily in an uptrend, hovering above all its major EMAs (Exponential Moving Averages). Post the recent vertical rally from the Rs 1,200 sub-zone to Rs 1,640 (all-time high), the stock underwent some profit booking, which needs to be considered healthy. Immediate support is seen around Rs 1,365, likely to cushion any fall, while sacrosanct support lies around Rs 1,300-1,280. It is advisable to have a pragmatic approach at the counter for the time being."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "The scrip was constantly making higher-top higher-lows, which is a sign of a well-established bull trend. In the last two sessions, it has reversed back after making a bearish candlestick (like bearish engulfing pattern) on daily timeframe. The last two days of reversal look genuine since they are accompanied by massive selling volume. One can book profit in the zone of Rs 1,450-1,550 and wait for a meaningful correction for adding longs."

AR Ramachandran from Tips2trades said, "KPIT Technologies looks bearish on daily charts with strong resistance at Rs 1,624. A daily close below support of Rs 1,380 could lead to target of Rs 1,204 in the near term."

DRS Finvest founder Ravi Singh said an upside momentum can only be seen when the stock reaches and sustains Rs 1,440 level.

The counter was last seen trading lower than the 5-day simple moving average (SMA) but higher than the 10-day, 20-, 30-, 50-, 100-, 150-, 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 59.37. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 136.89 against a price-to-book (P/B) value of 27.68.

The scrip has an analyst target price of Rs 1,275, Trendlyne data showed, suggesting a potential downside of 11 per cent in a year. It has a one-year beta of 0.3, indicating low volatility on the counter.

Separately, Kotak Institutional Equities, in its report, talked about unrealistic growth expectations of KPIT Tech which are embedded in its share price. "The shares trade at rich valuation 59 times FY2025E earnings per share. This implies elevated growth of 20 per cent over a period of 10 years with margin expansion to 20 per cent on average at the EBIT level, Kotak Institutional stated.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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