KPIT Tech shares extend gains; can they revisit recent 52-week high level?

Shares of KPIT Technologies rose on Wednesday, extending their gains for the second straight session. The stock moved 1.40 per cent higher to settle at Rs 845.90 over its previous close of Rs 834.25. Considering today's closing price of Rs 845.90, the scrip traded 3.10 per cent lower from its 52-week high of Rs 873, hit on February 13, 2023. That said, KPI Tech has gained 92.25 per cent from its one-year low of Rs 440, touched on May 26 last year.

The IT firm logged a net profit of Rs 104 crore in the December quarter (Q3 FY23), up 48 per cent from Rs 70.3 crore in the same period a year ago. The company's revenue from operations stood at 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. Its sales jumped 47.36 per cent to Rs 917.92 crore in Q3 FY23 against Rs 622.37 crore in the corresponding quarter of the previous fiscal. Sequentially, KPIT Tech reported a profit of Rs 83.48 crore in Q3 FY23 against Rs 65.10 crore in Q2 of the ongoing financial year.

Brokerage Anand Rathi expects the stock to reach Rs 850 (from the earlier target of Rs 700). "We roll forward to FY25 and upgrade to a 'Buy', raising our target to Rs 850 (from Rs 700), at 40x FY25," it said.

Technical analysts suggested that support on the counter could be seen at Rs 740, followed by Rs 749 level.

Osho Krishan, Senior Analyst - Technical & Derivative Research, Angel One, said, "On technical parameters, the Rs 800-780 zone is likely to provide cushion from any blip, while the sacrosanct support lies around Rs 740-odd levels. On the higher end, the stock is well-versed to continue its upward march in uncharted territory, and one may utilise any dip towards the mentioned zone to accumulate the counter from a short to medium-term perspective."

AR Ramachandran from Tips2trades said the stock may rise up to Rs 855 in the coming days. "Support will be at Rs 749," Ramachandran added.

The stock was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 69.03. 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 78.27.

The IT firm has an average target price of Rs 794, Trendlyne data showed, suggesting a potential downside of 5.53 per cent. The scrip has a one-year beta of 1.05, indicating average volatility on the counter.

KPIT Tech is an India-based 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.

Meanwhile, Indian equity benchmarks were mixed in afternoon deals as losses in consumer goods and pharma stocks counter gains in automobile and metals. As of 12:52 pm, the 30-share BSE Sensex pack fell 11 points or 0.02 per cent to trade at 61,021; while the broader NSE Nifty index edged 6 points or 0.03 per cent higher to trade at 17,936.

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