KPIT Technologies shares plunge 6% ahead of Q3 results. What analysts say

Shares of KPIT Technologies Ltd took a beating, falling over 6 per cent in Monday's trade ahead of its quarterly results scheduled for Tuesday, January 30. The stock fell even as the IT firm is expected to report 44-52 per cent rise in net profit for the December quarter on 35 per cent rise in sales. Analysts said investors would be keenly following details on organic and inorganic sales growth, margin guidance, deal pipeline, order wins and client decision making, especially for large deals.

Any major client specific issues, especially  from Europe, given ongoing geopolitical concerns and rising macro issues will also be watched. Add to that would be update on the recently announced M&As and future inorganic and capital allocation plans that would be on investor radar.

KPIT Tech shares fell 6.17 per cent to hit a low of Rs 1326.95 on BSE. With this, the stock ahs fallen 10 per cent for January so far.

Equirus Securities sees profit for KPIT rising 43.9 per cent YoY to Rs 144.60 crore on 35.4 per cent YoY rise in sales at Rs 1,242.10 crore. "We expect US$ revenue to grow 2.8 per cent QoQ (CC growth of around 2.8 per cent QoQ) led by ramp-up of earlier won deals. EBIT margins are expected to improve marginally 19 bps qoq. We expect other income to dip QoQ with expectations of lower forex income," it said.

PhillipCapital sees profit growing 52 per cent to Rs 152.80 crore on 36.1 per cent YoY rise in sales at Rs 1,248.60 crore.

"We expect strong CC revenue of growth +4.1% qoq on continued traction in Auto ER&D spends. Expect TCV in the range of $150-200 million range, similar to earlier quarters Margins are expected to expand by +50 bps on strong growth and absence of wage hikes," it said.

This brokerage said one would watch out for FY24 guidance update, deal wins and pipeline and spending outlook of US and EU auto OEMs.

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