KPIT Technologies zooms 64% in 14 trading days on strong outlook

Since November 1, 2021, the stock has zoomed 141 per cent after KPIT Technologies raised outlook for revenue and profit for the financial year 2021-22 (FY22)

Shares of KPIT Technologies hit a new high of Rs 749, surging 19 per cent on the BSE in Friday's intra-day trade, on the back of heavy volumes. In the past 14 trading days, the stock of the information technology (IT) consulting & services company has zoomed 64 per cent on strong outlook.

At 09:58 am, KPIT Technologies was up 11 per cent at Rs 701.85, aa against 0.78 per cent rise in the S&P BSE Sensex. Trading volumes on the counter more-than-doubled as compared to two-week average daily volumes. A combined 6.5 million equity shares had changed hands on the NSE and BSE till the time of writing of this report.

Since November 1, 2021, the stock has zoomed 141 per cent after the company raised outlook for revenue and profit for the financial year 2021-22 (FY22). The company said, for FY22, revenue growth outlook has been increased to 18 to 20 per cent, while earnings before interest, tax, depreciation and amortization (Ebitda) margin outlook have been revised to 17.5+ per cent. In comparison, the S&P BSE Sensex was down 2.6 per cent during the same period.

"The company is witnessing a robust demand environment resulting in strong order inflow and pipeline. With improved business visibility, the company has increased its revenue and profit outlook for the year," the management had said.

Meanwhile, globa; brokerage Goldman Sachs has initiated coverage on KPIT Technologies with a 'Buy' rating and a 12-month target market price of Rs 1,040 per share.

"As the auto industry shifts focus towards electric powertrains, our bottom up work with our global analyst teams indicates that R&D spending on CASE (connected, autonomous, shared, electric) technologies at the top 10 global auto R&D spenders is poised to triple over FY21-FY26 to $61 billion. Europe's CY35 ban on ICE vehicle sales has accelerated this shift," the foreign brokerage firm said its report dated January 5, 2022.

"KPIT is uniquely positioned as a 100 per cent automotive software integrator helping large OEMs accelerates their R&D projects in CASE related production platforms. We believe KPIT's expertise in high entry barrier areas like L3-L5 autonomous driving, vehicle to anywhere connectivity, digital clusters and battery management system enhancement; combined with a strong talent pool (3rd largest auto tech talent pool globally), position it well to gain wallet share in the rapidly growing CASE R&D arena," Goldman Sachs said.