KPIT Tech shares jump 32% in 2023 so far; can they hit Rs 1,000 in near term?

Shares of KPIT Technologies Ltd have outperformed the benchmark BSE Sensex so far this year. The stock has surged around 32 per cent on a year-to-date (YTD) basis compared to a 0.09 per cent fall in the 30-share BSE pack. The counter touched its 52-week high of Rs 948.30 in the previous session. The scrip, however, settled 0.34 per cent lower, at Rs 916.60, on Friday, halting a four-day winning run. A total of 1.21 lakh shares changed hands today on BSE, which was lower than the two-week average volume of Rs 1.34 lakh shares. Turnover on the counter stood at Rs 11.19 crore, commanding a market capitalisation (m-cap) of Rs 25,084.16 crore.

The IT company's net profit rose 11.20 per cent in March 2023 quarter, sequentially, to Rs 111.60 crore against Rs 100.40 crore in Q3 FY23. The revenue for Q4 FY23 was up 11 per cent quarter-on-quarter (QoQ) to Rs 1,020 crore from Rs 919 crore in Q3 FY23.

Prashanth Tapse, Research Analyst, Senior VP (Research), Mehta Equities, said, "KPIT Tech's Q4 results marginally missed street expectations on profitability while reporting decent revenue growth for the quarter."

Tapse also mentioned that the stock has also outperformed the IT space. "On daily charts, it is trading in a positive trend, and if this continues Rs 985-1,000 can be tested with support near Rs 880 level," he added.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Currently, the said counter is facing stiff resistance near Rs 945-950 levels. One already holding can book partial profits near the mentioned zone. A daily close above Rs 950 will open the doors to the Rs 1000 level in the near term. On the flip side, Rs 875 level will act as a cushion if profit booking starts from higher levels. As of now, fresh longs are not advised."

KPIT Tech traded higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 62.48. 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 90. It has a price-to-book (P/B) value of 18.22.

That said, KPIT Tech has an average target price of Rs 794, Trendlyne data showed, suggesting a potential downside of 13.16 per cent. The scrip has a one-year beta of 0.91, indicating low volatility.

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 settled on a higher note today, extending their gains for the seventh straight session. The domestic indices surged today, led by gains in banks, technology, pharma, automobile, metal, consumer goods and energy stocks.

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