KPIT Technologies stock at record high, enters overbought zone; can it cross Rs 1,500 mark?

November 18,2023

Shares of KPIT Technologies Ltd hit a record high in the afternoon session amid a rally in the broader market today. The multibagger IT stock gained 3.41% intraday to a high of Rs 1,438.50 against the previous close of Rs 1391.05 on BSE. At record high level, the KPIT Technologies stock is trading in the overbought zone, signals its relative strength index (RSI) of 73.1. A total of 0.27 lakh shares of the firm changed hands amounting to a turnover of Rs 3.80 crore on BSE. Market cap of KPIT Technologies rose to Rs 39,225.87 crore on Thursday.     

In a year, the stock has gained 111.67 per cent and risen 105.61 per cent in 2023.    During two years, KPIT Technologies shares have zoomed 227%.  

The stock has a beta of 0.3 in the last one year, indicating very low volatility. KPIT Technologies shares are trading higher than the 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

Shiju Koothupalakkal, Technical Research Analyst, Prabhudas Lilladher believes the stock can hit the target of Rs 1530. “The stock has recently witnessed a decent spurt gaining from Rs 1090 zone to touch the peak level of Rs 1424 zone where it has shown some resistance and is in consolidation since the last 2-3 sessions. The bias is maintained strong and after the short breather can carry on the momentum further for next target of Rs 1500-1530 levels. The near term support would be near Rs 1310 zone below which the bias can turn little bit weak,” he added.  

Axis Securities has a buy call on the KPIT Tech stock for a target of Rs 1,500.  

“We believe KPIT has a resilient business model and strong earnings visibility through its multiple long-term contracts with globally leading brands. We further believe that KPIT is well-positioned to capture the immense growth opportunity in the industry considering 1) Robust demand for ER&D spend, 2) Focus on client retention for long-term sustainable growth, 3) Margin tailwinds driven by cost efficiencies, lower input costs, rupee depreciation, and lower travel cost, and We expect KPIT will attain strong revenue growth of 29% CAGR over FY24E- FY26E. We recommend a BUY on the stock with a target price of Rs 1500/share,” said the brokerage.  

Abhijeet from Tips2trades said, "KPIT Technologies is bearish and also overbought on the Daily charts with strong resistance at Rs 1,419. A daily close a/below support of Rs 1,373 could lead to target of Rs 1,204 in the near term." 

Financial Performance     

The rally in the stock can be attributed to strong earnings of the firm.     

The firm reported a 69.21 percent rise in net profit at Rs 141.40 crore for the second quarter.  

On a sequential basis, net profit grew 5.18 percent over the last quarter. Consolidated revenue rose 60.23 percent over last year and by 8 percent over the last quarter to Rs 1,208.86 crore in the September quarter of FY24.  

In the June 2023 quarter, KPIT Technologies logged a 56 percent year-on-year rise in net profit to Rs 134.43 crore against Rs 85.4 crore in the corresponding quarter of the previous fiscal. Sequentially, consolidated net profit climbed 20% from Rs 111.6 crore in Q4FY23.    

Consolidated revenue from operations climbed nearly 60% on year to Rs 1,097.6 crores in Q1 from Rs 685.7 crore in Q1FY23. Sequentially, revenue climbed 7.9%.  

KPIT Technologies logged a 7.2% rise in net profit for the quarter ended March 2023 on a quarter-on-quarter basis. On a year-on-year basis, net profit rose 38.60% to Rs 111.58 crore. On an annual basis, revenue zoomed 39% to Rs 3365 crore in FY23 against Rs 2432.38 crore in the previous fiscal. Net profit rose 40% to Rs 386.86 crore in FY23 against Rs 276.24 crore in FY22.     

Net profit rose 39% to Rs 381 crore in the fiscal ended March 2023 against Rs 274.23 crore in the March 2022 fiscal. Sales climbed 37.46% to Rs 3405 crore in the last fiscal against Rs 2477.15 crore in the March 2022 fiscal.     

About KPIT Technologies      

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.