Dual shock for KPIT Technologies stock; analysts see more weakness, share price targets

Shares of KPIT Technologies suffered a double blow on Wednesday after the automotive-based software major said that its financial performance for the June quarter (Q1FY27) will be weaker than previously anticipated after an unexpected slowdown in business from several European automakers. The statement was communicated to the bourses after market hours on Tuesday. Subsequently, KPIT Technologies shares opened 10% lower at Rs 604.35 today against the previous close of Rs 671.45. 

Sentiment around the stock was hit for the second time after 15 minutes of trading today when the company issued a clarification on outlook for Q1FY27 and for the remainder of the year. At 9:30 am, the firm said it expected the Q2 performance of the ongoing fiscal to be similar to the current quarter or Q1. 

KPIT said, "The expected impact as stated on Q1 FY27 revenues comprises of multiple client actions. We have also indicated the growth avenues that we foresee. Considering both these, we expect Q2 FY27 revenue to be in the similar range as Q1 FY27 revenue."

ALSO READ: KPIT Technologies warns of a weak Q1; JPMorgan downgrades stock, cuts price target 

KPIT Technologies shares, which stood at Rs 604.35 at 9:35 am, plunged another 6% to Rs 570.35 in the next two minutes or at 9:37 am. 

Subsequently, the software major stock hit a 52-week low of Rs 555.30, slipping 17.29% intra day. Market cap of the firm slipped to Rs 15,279 crore. 

Total 18.52 lakh shares of the firm changed hands amounting to a turnover of Rs 105.64 crore. Later, the stock ended 16.97% lower at Rs 557.50. Market cap of the firm declined to Rs 15,283 crore.  

KPIT Technologies stock has fallen 52 per cent since beginning of the year and declined 66.33% in two years.   

KPIT Technologies shares are trading lower than 5 day, 10 day, 20 day, 30 day, 50 day, 150 day, 200 day and higher than the 50 day and 100 day, moving averages.  

Sachin Gupta, VP – Technical Research at Choice Equity Broking advised investors to be cautious on the KPIT tech counter. 

"On the weekly chart, the stock has broken down from a bearish flat pattern, confirming a significant deterioration in its technical structure. From a technical standpoint, momentum remains decisively negative. The price has fallen decisively below the Ichimoku Cloud and the middle Bollinger Band, accompanied by exceptionally high trading volumes, indicating sustained selling pressure and confirming the breakdown of key support levels. Any recovery is likely to encounter strong resistance in the Rs 620–Rs 640 zone, where fresh selling interest may emerge. For long-term investors, it would be prudent to wait for signs of a stable base formation above the key support area of Rs 520– Rs 500 before considering the possibility of a sustainable trend reversal," said Gupta. 

Shitij Gandhi, AVP - Equity Technical Research, SMC Global Securities expects the stock to fall to Rs 475 level. 

"KPIT Technologies has slipped below a key support zone of Rs 700 level, completing a bearish breakdown from a prolonged distribution pattern. Multiple failed attempts to reclaim the 20- and 50-day moving averages on daily charts, followed by fresh selling, indicates that supply continues to dominate at higher levels. The decisive breakdown below the recent base of Rs 650-700 zone suggests the corrective phase may not be over, with sellers firmly in control. Unless the stock quickly recovers above the broken support and sustains there, the bias is likely to remain negative which could take the prices towards Rs 475 levels as well. Traders should watch for follow-through selling, while any pullback towards the previous support zone could now act as a fresh resistance area," said Gandhi. 

Virat Jagad, Sr. Technical Research Analyst at Bonanza said, "The stock has witnessed a decisive breakdown below the key support near Rs 626 with a significant surge in volumes, indicating strong selling pressure. Price is trading below all major EMAs, confirming a bearish trend, while RSI has slipped below 30, reflecting weak momentum. Existing holders should maintain a strict stop-loss below Rs 560 and consider fresh positions only after the stock reclaims the Rs 626 level with strong volume confirmation." 

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.