KPIT Technologies shares in bear grip: Stock falls 22% in three months, can it recover? 

Shares of KPIT Technologies Ltd have lost 22% in the last three months, sending the stock in the red for one year and in 2024. The multibagger KPIT Technologies stock has clocked 1,433% returns in five years and gained 181% in three years. 

KPIT Technologies shares rose 5.55% to Rs 1416 in early deals on Tuesday on BSE. The stock touched an all-time high of Rs 1928.75 on July 12, 2024. It has lost 28% from its record high till date. 

A total of 0.73 lakh shares of the firm changed hands amounting to a turnover of Rs 10.12 crore on BSE. Market cap of KPIT Technologies rose to Rs 38,811 crore today

In a year, the stock is down 5.48 per cent and lost 5.98 per cent this year.   

In terms of technicals, the relative strength index (RSI) of KPIT Technologies stands at 38.6, signaling the stock is trading neither in the overbought nor in the oversold zone. The stock has a beta of 0.9 in the last one year, indicating low volatility. KPIT Technologies shares are trading lower than the 10 day, 20 day, 50 day, 100 day and 200 day moving averages.   

Brokerage Prabhudas Lilladher Capital has assigned a price target of Rs 2,500 on the KPIT Tech stock. 

"The stock has been in a strong uptrend since quite a long time and recently with some consolidation happening has been moving within a range with bias maintained positive. Currently, a decisive breach above 1900 levels shall indicate a breakout for fresh upward move with RSI showing strength and is on the rise with much upside potential visible. With the chart technically looking good, we suggest to buy the stock for an upside target of Rs 2500 keeping the stop loss of Rs 1500," said brokerage.   

Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox said," KPIT Technologies, currently trading at Rs 1,410, has seen a notable decline of 33% from its peak, underperforming relative to the broader IT sector. However, the stock is now hovering around a strong base of Rs 1,300–Rs 1,360, a support zone it has successfully held for nearly a year since December 2023. Technical indicators point to a potential turnaround. A bullish divergence is evident in the Relative Strength Index (RSI), which is also showing signs of strength. Furthermore, short-term momentum has shifted positively as the stock has managed to cross above its 20-day exponential moving average (EMA). From a risk-reward perspective, KPIT Technologies presents an attractive buying opportunity at current levels. The stock has the potential to move toward the Rs 1,580–Rs 1,620 range in the short term. However, a decisive break below the Rs 1,300 support level would negate this view."

JPMorgan has reiterated its 'Overweight' rating on automobile-industry-focused KPIT Technologies, citing the company's likely recovery despite recent underperformance.

The brokerage has a price target of Rs 1,900, and it expects 42 percent returns from the last closing price of Rs 1,342. Its bear-case downside capped at 10 percent.

The global brokerage said the near-term softness in the company's performance is cyclical and transient, not structural. While the current pace of investments in EV and hybrid technologies has slowed, the brokerage said that such investments will continue, though at a measured pace.

Additionally, the board of KPIT Tech had approved raising up to Rs 2,880 crore through Qualified Institutional Placements (QIP) which JPMorgan said will be used for tuck-in mergers and acquisitions.

Recently, JP Morgan named KPIT Tech its top pick among ER&D firms, citing expectations of a recovery in the auto sector to drive growth from 2025. "Auto weakness is more cyclical and transient, and growth should accelerate from next year," JPMorgan said.     

AR Ramachandran, an independent analyst said, "KPIT Tech stock price is  bullish on the Daily charts with strong support at Rs 1365. A Daily close above the resistance of Rs 1423 could lead to Rs 1600 in the near term."

KPIT Technologies Limited is a 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.