KPIT Technologies shares crash 46% in a year; should you add or avoid?

Shares of KPIT Technologies Ltd fell 5.97 per cent in Tuesday's trade to hit a low of Rs 670. The stock was later trading 5.12 per cent lower at Rs 676. At this level, it has declined 41.86 per cent on a year-to-date (YTD) basis and 46.28 per cent over the past one year.

Some market participants remained largely divided on the counter amid continued selling pressure in IT stocks.

Ravi Singh, Chief Research Officer at Master Capital Services, said, "KPIT Tech shares remained weak as investors continued to digest the company's recent earnings and the broader cautious outlook for the IT sector. While the company continues to benefit from rising demand for automotive software and electric vehicle technologies, concerns over margin pressure and slower spending by global clients have weighed on sentiment."

He added, "Despite the current weakness, KPIT's long-term growth prospects remain intact, supported by its strong presence in the global mobility and automotive technology space."

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, stated, "The stock has largely remained in a downtrend over the past one year, in line with the broader weakness seen in IT stocks in the short to medium term. Investors with a long-term horizon may continue to hold their positions. However, fresh buying should be avoided from a short- to medium-term perspective. Going forward, the company's earnings performance and management commentary will be key factors to watch."

From a technical perspective, AR Ramachandran, a Sebi-registered research analyst at Tips2trades, noted, "KPIT Tech is bearish but also oversold on daily charts with next support at Rs 660. Investors should buy only if a daily close is above the resistance of Rs 696 for an expected target of Rs 770 in the near term."

Meanwhile, the counter witnessed heavy trading volume on BSE, with around 2.71 lakh shares last seen changing hands. This was significantly higher than the two-week average volume of 73,000 shares. Turnover on the counter stood at Rs 18.56 crore, with the company's market capitalisation (m-cap) at Rs 18,499.22 crore.