Global financial services firm Goldman Sachs has turned bullish on KPIT Technologies, seeing a healthy double-digit upside potential in the stock.
Goldman Sachs has increased its 12-month target price on KPIT Technologies stock from ₹1,500 per share earlier to ₹1,710 per piece, indicating a 14.2% upside from the closing price on Thursday.
The brokerage stated that KPIT Tech’s balance sheets are getting stronger, with analysts estimating an almost $420 billion in net cash balances during the calendar year 2023 (CY23) at the top 22 original equipment manufacturers (OEMs), compared to $379 billion at companies such as KPIT Technologies in the previous calendar year 2022 (CY22).
Large automakers remain committed to electrification or autonomous vehicle efforts, and expect improved EV margin and lower losses from autonomous vehicles in 2024, Goldman Sachs stated.
In October, Goldman Sachs maintained its ‘buy’ rating on the KPIT Tech stock and raised the target price to ₹1,420 per share.
Last week, another brokerage firm Kotak Institutional Equities turned bearish on KPIT Tech, initiating a ‘Sell’ rating on the stock, with a lower price target. The brokerage set a target price of ₹940 per share on the stock despite the company’s shares giving healthy returns of 23% in a month’s time without any commensurate fundamental catalyst.
Kotak Institutional finds KPIT Technologies’ stock valuations to be high at 59 times the estimated forecast for the financial year 2025 (FY25E), extrapolating the recent robust performance.
For the September quarter, KPIT Technologies witnessed a sharp 68.73% rise in consolidated net profit at ₹140.85 crore compared to ₹83.48 crore in the same period last year.
The stock was trading 0.67% lower at ₹1,489.25 apiece on Friday, December 1.
(Edited by : Shloka Badkar)
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