This software integration player climbs 8% in 2 sessions; co. guides for strong FY25 revenue guidance

KPIT Technologies shares since the announcement of Q4 results in the previous day’s trade have galloped a sharp 8 per cent to day’s high of Rs 1532.2 per share on the BSE.

The independent software integration player offering services to global auto giants announced a 6 per cent sequential increase in PAT to Rs164.4 crore as against Rs 155.3 crore announced in the previous December ended quarter.

The company’s revenue in dollar terms sequentially rose 6.7 per cent sequentially to Rs 15.9 crore in comparison to Rs 14.9 crore. 

The earnings before interest and tax (EBIT), a measure of operating profitability, grew 5.6 per cent quarter-on-quarter (QoQ) to Rs 220.2 crore as against Rs 208.6 crore. Margin, however, stood flat at 16.7 per cent as against 16.6 per cent reported in the previous quarter.

At 11:05 am, however, shares of the company pared all their gains, and traded in the red with a cut of 0.72 per cent or Rs 10.8 at Rs 1497.7 apiece on the BSE.

Brokerages view on KPIT after Q4FY24 results

JP Morgan maintains 'neutral' stance on the stock with the target raised to Rs 1450 from Rs 1400.

Goldman Sachs, on the other hand, maintained its 'buy' stance with the target raised to Rs 1900 from Rs 1850 earlier, signifying possible gains of 26 per cent. The brokerage on a bullish note said that the company for the first time guided for revenue growth of 18-22 per cent in FY25.Also, it added that the firm plans to invest 1.7% of GSe FY25 topline in a fresh ESOP program.Adjusted for this investment, EBITDA margin for FY25 could have been as high as 22.2%+ vs guided range of + 20.5%, it added.

Fundamentals 

The company's fundamentals look good with debt to equity at zero.  Also, in the management commentary, the company noted that it consistently delivered fifteen sequential quarters of healthy growth in revenues and operating profits. Also, it added that it will pivot investments on enhancing domain practices and sharpen focus on Commercial Vehicles and Asia strategy.