Since the announcement of its Q3FY23 results last week, KPIT Technologies ltd share price has been on an upward trend. The stock opened higher and reached a new all-time high of ₹819.55 on the NSE during early morning trading on the 8th of February, 2023. Market experts predict that the stock may reach ₹850 in the next two to three months as it has broken through the sideways channel above ₹760 per share. They believe that the company has outperformed its peers in terms of its better quarterly results and stronger position.
KPIT Technologies Limited is a multinational information technology company based in India that specializes in digital solutions and services for the automotive and transportation industries. The shares of the company are traded on the National Stock Exchange of India and BSE Limited. This article will examine KPIT’s price performance, business segments, and future prospects.
During the announcement of its Q3FY23 results, KPIT Technologies revealed its intention to pay a dividend. The Board of Directors authorized a preliminary dividend of Rs. 1.45 (14.5%) per equity share worth Rs. 10 each for the fiscal year 2022-2023. The dividend payment’s record date has been established as February 10, 2023.
About KPIT– What does the company do?
KPIT’s main business segments are automotive and transportation. The automotive segment offers the automotive industry technology solutions and services such as design, engineering, and software development. The transportation segment provides the transportation industry with digital solutions and services such as freight management, supply chain optimization, and other services.
In recent years, the automotive sector has been a key driver of KPIT’s growth. The company has strong relationships with leading automotive manufacturers such as Ford, General Motors, and Toyota and is known for providing high-quality services and solutions. The company’s emphasis on innovation and technology has also assisted it in staying ahead of its competitors in the automotive industry.
Transportation is also rapidly expanding as businesses strive to improve their supply chain and logistics operations. With a strong track record of delivering digital solutions and services to the transportation industry, KPIT is well-positioned to capitalize on this growth. The company’s expertise in areas such as data analytics and artificial intelligence has helped it differentiate itself from competitors and secure significant contracts with leading transportation companies.
Is KPIT a debt-free company?
The company is almost debt free and is expected to give a good quarter; the Company has been maintaining a healthy dividend payout of 30.8% for investor.
Is KPIT Technologies Ltd overpriced or underpriced?
When comparing KPIT Technologies Ltd’s key valuation ratios to the past, it appears to be in the Overvalued zone.
What is the future of KPIT share price?
KPIT share price has risen significantly in recent years, outpacing the broader Indian stock market according to price charts. The price of kpit technologies was around INR 140 in early 2017. Since then, the price has risen to more than INR 800, representing a more than 100% increase. This outstanding performance is the result of a combination of strong earnings growth and a bullish outlook for the company’s future prospects.
Despite this stellar performance, the share price of KPIT has been volatile in recent months. Concerns regarding regulation as well as the potential for a decrease in the demand for technical support have increased scrutiny on the global technology sector. These concerns have resulted in a general sell-off in technology stocks, affecting KPIT’s stock value to some extent. Despite this fluctuation, the securities have stayed relatively resilient and also have performed well in the long run.
What are the key values for KPIT?
* As of 9th Feb, 2023.
- 1.99% away from 52 week high (819.55*) (lifetime high)
- 82.38% away from 52 week low (440.40*)
- Has a high PE ratio of 63.24, High PB ratio of 16.57
- Face value of 10 and a market cap of 22,019 crs.
- Bullish Momentum – Above Short, Medium and Long Term Moving Averages
Return on Equity has increased to 24.80% compared to the previous three years’ average
In the last three years, sales have increased at a healthy rate of 55.96%
In the last three years, net profit has grown at a healthy volume of 50.63%
Sales increased by 28.73% over the last four quarters.
- Outperformer – KPIT Technologies up by 12.08% v/s NIFTY 50 up by 0.07% in last 1 month*
Highlights of KPIT technologies (2022)*
1. Organic revenue increased by 4.9 percent in 2Q23.
2. 18.5 percent EBITDA margin
3. Deals worth $272 million include a $100 million agreement with Renault.
4. Management is confident of exceeding revenue projections.
5. A quarterly dividend of Rs 1.45 per share has been declared.
KPITtech (CMP: Rs 776.30* (please check live share price) ; Market Valuation: Rs 22,019 crore) noted another financial quarter with strong numbers that put revenue higher than expected and margins in line with street estimates. Revenue increased by 23.1 percent sequentially, while the EBITDA margin remained constant at 18.5 percent. KPIT revenue increased by 24.6 percent and 4.9 percent year on year and quarter on quarter. This expansion was led by Architecture and Middleware consulting, which increased by 73.1 percent year on year and 50.1 percent chart. KPIT also received a TCV of $272 million, which included a $100 million mega interaction of Renault for the next-generation Software – defined Vehicle (SDV) program.
KPIT tech attrition rate is decreasing; the company saw a 3 percentage point drop this quarter. Management stated that aggressive hiring will increase revenue and profit per employee. The acquisition of Technica resulted in the employment of 291 people. Net hiring totaled 574 in December Q3, bringing the total headcount to 10,490.
Is KPIT good for the long term?
KPIT anticipates exceeding upwards its FY23 guidance of 31-32 percent CC growth and 23 percent organic growth, and management believes that overall growth can exceed 33 percent with more than 24 percent organic growth. The EBITDA margin guidance range of 18.5-19% remains unchanged. The first quarter of Technica integration was seasonal, and the second is expected to be as well. Any chances of immediate margin expansion are likely to be dampened by integration costs, seasonality, and acquisition-related amortization.
Overall, the company is on solid ground in terms of reliable revenue and deal pipeline visibility. It is well positioned due to manufacturing to benefit from the industry’s ongoing transformation and increase its financials profitability for investor and traders alike.
