KPIT Technologies rallies 32% in 6 days, hits new high on strong outlook

The company said, for FY2022, revenue growth outlook increased to 18 per cent - 20 per cent, and Ebitda margin outlook raised to 17.5+ per cent.

stocks, market, investors, investment
Illustration by binay sinha

Shares of KPIT Technologies rallied 9 per cent to hit a new high of Rs 409.80 on the BSE in Wednesday's intra-day trade amid heavy volumes on strong outlook. The stock of the information technology (IT) consulting & software company surpassed its previous high of Rs 385, touched on August 16, 2021.

In the past six trading days, the market price of KPIT Technologies has surged 32 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 has been revised to 17.5+ per cent.

The management said 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.

Meanwhile, July-September quarter (Q2FY22) was the fifth sequential quarter of margin expansion, despite higher-than-average increments during the quarter. In Q2FY22, the company's Ebitda stood at 17.6 per cent as compared to 17.3 per cent in Q2FY21. Net profit for the quarter grew 134 per cent year on year and 8 per cent on quarter-on-quarter (QoQ) at Rs 65.1 crore. Revenue was up 4.8 per cent QoQ at $80.36 million in constant currency (CC) terms.

KPIT Technologies said sequential CC growth was across commercial vehicles and passenger cars verticals, broad based within geographies. "Electric Powertrain and Diagnostics practices led the growth during the quarter. Sequential net profit growth aided by higher operating margins, in-line depreciation and higher yield on cash though the other income was lower due to unfavorable currency movements," it added.

At 11:19 am, the stock was trading 8 per cent higher at Rs 403 on the BSE, as compared to a 0.42 per cent decline in the S&P BSE Sensex. Trading volumes on the counter nearly doubled with a combined 3.6 million equity shares having changed hands on the NSE and BSE till the time of writing of this report. In the past six months, KPIT Technologies has outperformed the market, as its market price has more-than-doubled or is up 102 per cent, against 21.6 per cent rise in the Sensex.