KPIT Tech hits record high, surges 11% after raising FY24 growth outlook

KPIT increased FY24 CC growth outlook to 37%+ from 27%-30% earlier and EBITDA outlook increased to 20%+ from 19%-20% earlier.

Shares of KPIT Technologies hit a record high of Rs 1,249.95, as they rallied 5 per cent on the BSE in Tuesday’s intra-day trade in an otherwise volatile market after the company raised fiscal 2023-24 (FY24) growth outlook. In past two trading days, the stock has surged 11 per cent. In comparison, the S&P BSE Sensex was down 0.1 per cent at 64,051 at 09:311 AM.

KPIT Technologies said it increased FY24 constant currency (CC) growth outlook to 37 per cent plus from 27 per cent - 30 per cent earlier. Earnings before interest, taxes, depreciation, and amortization (EBITDA) outlook increased to 20 per cent plus from 19 per cent - 20 per cent earlier.

The management said the company’s medium-term business fundamentals and growth drivers remain unchanged. “While the geopolitical situation and economic uncertainty across geographies is leading to a softer macro environment, we keep a watchful eye on the impact on our clients and their business priorities,” the management said.

Meanwhile, auto industry-focused KPIT Technologies on Monday reported a 69.21 per cent jump in its September quarter (Q2FY24) net profit at Rs 141 crore. Its revenues from operations grew to Rs 1,199 crore in Q2FY24 as against Rs 745 crore in the same period a year ago and Rs 1,098 crore in the preceding April-June quarter. The company reported $ revenue growth of 54.2 per cent year-on-year (YoY). On sequential basis, it posted 9 per cent CC growth, 8.4 per ent reported $ growth.

EBITDA margin maintained at 20 per cent post full quarter impact of wage hikes during the quarter. Gross Impact of wage hikes was 250 bps which was offset by revenue growth and net realization improvement, the company said.

KPIT Tech said it saw broad based growth across practices and verticals. Growth led by Strategic Accounts, Passenger Car vertical, Electric Powertrain, Autonomous Driving and Digital Connected Solutions practices.

KPIT’s business is focused entirely on the mobility industry with its niche offerings in power trains, autonomous and connectivity categories. The company offers software IP, software integration, feature development, and verification and validation services to global OEMs and Tier-I suppliers across its key practices.

KPIT has deep-domain technical capabilities across its key practices. Further, the company has an established client base, which includes majority of the top-20 global OEMs, to whom it offers multiple services. KPIT’s niche offerings and strong relationships have driven healthy revenue growth over the years.

Strong demand for electric vehicles (EVs) across geographies owing to country-wise regulation, has resulted in increased IT spending on EVs, along with emerging technologies such as autonomous driving, and connected and shared mobility. These factors, coupled with healthy order book position, are expected to drive KPIT’s revenue growth over the near to medium term, according to analysts.