KPIT Technologies Share Price Target: Company Improved Margins And Reported Strong Growth BUY, SELL or HOLD? (image source: KPIT Gallary)
KPIT Technologies Share Price Target: KPIT Shares on Tuesday was down by 1 per cent on the NSE and BSE at Rs 1,494 per share around 11:50 am. Despite reporting strong financials, should investors BUY, SELL or HOLD? Check brokerage recommendations.
KPIT Technologies Share Price Target:
Stock Brokerage JM Financial has given a ‘BUY’ rating for the tech stock, setting the KPIT Technologies share price at Rs 2,030 per share. The brokerage cited q4 and upcoming investments in R&D.
“KPIT’s consistent upfront investments in R&D/people are a clear reflection of its own conviction in the opportunity. KPIT announced a new expanded ESOP scheme with a potential impact of INR 1bn (1.7 per cent of rev) in FY25. Despite this, however, the company guided for a 20.5 percent+ EBITDA margin (+20bps YoY) in FY25. We build these in our assumptions driving a 4-5 per cent increase to our FY25/26E EPS. KPIT trades at 45x FY26E EPS, c.2x PEG, reasonable for a company with such strong earnings visibility. We reiterate BUY with a revised TP of INR 2,030 (from 1,860),” said JM Financial.
Strong Revenue Growth and Improved Margins
KPIT Technologies reported substantial growth in revenue from operations, reaching Rs 1,317.8 crore in Q4FY24, marking a 29 per cent increase from Rs 1,017.4 crore recorded in the same period last year. Additionally, the company’s EBITDA margin stood at 20.7 per cent during the quarter, reflecting a notable improvement of 160 basis points YoY.
Exceeding FY24 Guidance with Constant Currency Growth
The company reported a remarkable constant currency growth of 39 per cent for the fiscal year 2024, surpassing its increased guidance for the year. Furthermore, KPIT Technologies declared a dividend of Rs 6.70 per share, enhancing shareholder value.
Key Engagements and Partnerships
KPIT secured a Total Contract Value (TCV) of new engagements amounting to $261 million during Q4FY24. Notably, a leading European car manufacturer selected KPIT for significant engagements in the electric powertrain and connected domains. Additionally, the company forged crucial partnerships in the connected, electric, and conventional powertrain domains with a leading American car manufacturer.
Vision for the Future
Commenting on the performance of FY24, Ravi Pandit, Co-founder and Chairman of KPIT, emphasized the company’s commitment to reimagining mobility for a cleaner, safer, and smarter world. He highlighted KPIT’s role in leading technology transformations with a focus on sustainability across various aspects. Pandit expressed confidence in the company’s performance going forward, underscoring its growth as a testament to global needs and expertise.
About KPIT Technologies
KPIT Technologies Limited is an Indian multinational corporation renowned for providing engineering research and development services to automotive companies. Widely recognized as KPIT, the company operates development centers across Europe, USA, Japan, China, and India, serving as a prominent player in the automotive technology sector.
