Stock of this IT company has zoomed over 1,200% in 3 years
Shares of KPIT Technologies moved higher by 7 per cent to Rs 874.95 on the BSE in Friday’s intra-day trade, in an otherwise volatile market, amid heavy volumes. The stock of the information technology (IT) company had hit a record high of Rs 876 on February 17, 2023.
In the past three years, the market price of KPIT Technologies has zoomed 13 times, or 1,248 per cent, as compared to 89 per cent rise in the S&P BSE Sensex. At 12:12 PM, it was trading 6 per cent higher at Rs 867.60, as against 0.06 per cent decline in the benchmark index. Trading volumes on the counter nearly doubled, with a combined 5.07 million equity shares having changed hands on the NSE and BSE till the time of writing of this report.
KPTI Technologies is a global partner to the automotive and mobility ecosystem for making software-defined vehicles a reality. It is a leading independent software development, and integration partner helping mobility leapfrog towards a clean, smart, and safe future.
On Wednesday, March 15, KPIT Technologies announced its partnership with Honda to realize the journey of Honda’s Software-Defined Mobility (SDM).
“With Honda’s next-generation software architectur and control-safety technology, and KPIT’s deep domain and software expertise in the areas of Autonomous Driving, Vehicle Electrification, In-Vehicle Infotainment systems and Platform Software, Honda will continue to provide various services and enhanced value to customers around the world in the future,” KPIT Technologies said in a statement.
The partnership in mid to long term will expand to over 2,000 Software and Vehicle System Professionals from KPIT across the globe to power Honda’s SDM roadmap until year 2030 and beyond, Kishor Patil, CEO, KPIT Technologies said.
Meanwhile, in the October-December quarter (Q3FY23) the company’s revenue came in at 47.4 per cent year-on-year (YoY), driven by organic growth of 24 per cent YoY (4.9 per cent quarter-on-quarter (CC terms) amid acquisition of technology, strong order book in SDV (software design vehicle), and cross currency benefits.
Earnings before interest, taxes, depreciation, and amortization (Ebitda) margin was, however, impacted by 22bps due to increase in wage hike post acquisition and integration expenses. However, operating efficiency & superior product mix, offset further declines.
The growth in the mobility & autonomous space is the priority for the customers. As a result, KPIT achieved a mega deal extension of $100 million from Renault. Total contract value (TCV) for the quarter stands at $272 million.
The company derives most of its revenue from innovative technology and the scalability of the industry is huge. Automotive manufacturers are prioritizing investment in new age technologies and KPIT is at the forefront of these, according to analyst at Geojit Financial Services.
Despite the industry becoming more cautious about the spending, KPIT has not seen any deal rollover from its top clients in the near term. Positively, the company is well placed to take advantage of Its SDV (Software Designed vehicle) program through organic & inorganic route, the brokerage firm said, valuing KPIT at 40xFY25E EPS with a target price of Rs 923 per share.
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