KPITTECH - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.6

📊 Core Financials & Profitability

Profit Growth: PAT surged from ₹132 Cr to ₹229 Cr QoQ — a massive 204% jump, reflecting strong operational leverage.

Return Metrics

ROE: 27.1% and ROCE: 34.4% — exceptional, indicating highly efficient capital deployment.

EPS: ₹23.2 — solid for a ₹1,305 stock, supporting valuation.

Debt Profile: Debt-to-equity at 0.07 — very low, offering financial flexibility.

Dividend Yield: 0.65% — modest, but consistent with shareholder returns.

💸 Valuation Indicators

Metric Value Insight

P/E Ratio 56.3 Richly valued vs. industry PE of 30.0.

P/B Ratio ~18.3 Expensive relative to book value ₹71.2.

PEG Ratio 2.13 Indicates overvaluation relative to earnings growth.

🔍 Conclusion: Valuation is elevated, but justified by stellar earnings growth, high ROE, and sector leadership.

🚗 Business Model & Competitive Edge

Core Operations: KPIT Technologies is a leading software integration partner for automotive OEMs, specializing in embedded systems, AI, and digital mobility.

Strategic Strengths

High ROE of 28% vs. industry average of 13%

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37% net income growth over 5 years, outperforming industry peers

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Positioned at the intersection of automotive electrification, autonomous driving, and connected mobility.

Growth Outlook

Analysts forecast a 1-year price target of ₹1,377, implying ~5.5% upside

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Strong institutional interest with DII holdings up 1.07%.

Financial strength score: 70/100; valuation score: 36.8/100 — high quality, moderately expensive

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📉 Technicals & Entry Zone

RSI: 65.3 — slightly bullish, nearing overbought.

MACD: 15.0 — strong momentum.

DMA Levels: Price near 50-DMA and slightly below 200-DMA — consolidation zone.

📌 Suggested Entry Zone: ₹1,240–₹1,275 — near 50-DMA, offering a better margin of safety.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong fundamentals, low debt, and leadership in automotive software make KPIT a long-term compounder.

Buy on Dips: Prefer entry below ₹1,275, especially if RSI cools off.

Monitor: OEM partnerships, margin trends, and global EV adoption.

You can explore KPIT’s ROE analysis and earnings trajectory

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or Trendlyne’s analyst targets and technical breakdown

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for deeper insights. Let me know if you'd like a peer comparison with Tata Elxsi or L&T Technology Services next.

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simplywall.st

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trendlyne.com

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