KPIT Tech shares jump 10% to hit 52-week high; should you buy, sell or hold?

Shares of KPIT Technologies rose sharply in Thursday's trade to touch their one-year high level. The stock surged 9.52 per cent to scale its 52-week high peak of Rs 812.80 against a previous close of Rs 742.15.

The IT firm reported 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 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.

"Strong performance this quarter has gotten factored in the recent share price run-up," stated Choice Equity Broking Research.

The brokerage, in its recent note, said KPIT Tech's cloud business unit grew 20.8 per cent (QoQ) and 49.8 per cent (YoY) amid recent deal wins. The company, Choice mentioned, has won new deals for a total contract value of $272 million, almost double from the previous quarter.

"Focus remains on talent development and retention, with employee turnover showing a declining trend over the last two quarters. The company expects this trend to stay, going forward. This should aid margins," Choice stated.

On the technical charts, support on the counter could be seen at Rs 749, an analyst said.

"Rs 790 is now a strong resistance on the Daily charts for KPIT Technologies. A close above this resistance could lead to Rs 855 in the coming days. Support will be at Rs 749," said AR Ramachandran from Tips2trade.

The stock was last seen trading higher than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 71.05. 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 69.63.

KPIT Tech has an average target price of Rs 740.33, Trendlyne data showed, suggesting a potential downside of 6.52 per cent. The scrip has a one-year beta of 1.02, indicating average volatility.

KPIT Technologies, formerly known as KPIT Engineering, was demerged from Birlasoft in April 2019.

Meanwhile, Indian equity benchmarks slipped today in late deals, dragged by banks, financials and energy stocks.

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