KPIT Tech Zooms 11% Post Acquisition, Buy Now For Target Price Of Rs 900

Shares of KPIT Technologies zoomed as much as 11% intraday after its board approved acquisitions of 4 companies of Technica Group for approximately 640 crores or 80 million Euros. The amount of the deal is expected to be paid over 6 months. After the settlement of the amount, Tehnica group will be owned by
KPIT Technologies.

Meanwhile, global research firm Goldman Sachs has assigned buy rating to KPIT Technologies with a target price of Rs 900 apiece. Currently, the stock of KPIT is trading at a discount of 20% from its highs.

The stock opened at Rs 600 apiece, surged the intraday high of Rs 674 apiece and intraday low at Rs 600 apiece. The stock's 52-week high is Rs 800 apiece and 52-week low is quoted at RS 300 apiece.

The mid-cap company has a market capitalization of Rs 18,244.27 crore. The stock has given multibagger returns to investors with 5 years return at 539%, 3 years return at 625%, and 1-year return at 96%.

The company operates in the IT Software sector.

The board of directors of KPIT Technologies stated in its BSE filing, "The deal is expected to be closed by the end of October 2022, post fulfillment of customary closing conditions, and at the end of it, Technica Engineering will be fully owned by KPIT Technologies. The deal will be EPS accretive upon consolidation."

The acquisition is mainly for accelerating the transformation toward Software-Defined Vehicles. For acquiring Technica Group, KPIT mentioned, "KPITs' extensive software expertise gets vertically integrated with Technica Engineerings' production-ready system prototyping specialization making it a game changer for the industry."

Soon after the acquisition, Mr Joseba Rodriguez Martinez, CEO of Technica Engineering, said, "For the last 14 years, Technica has built a team passionate about cutting-edge tech in network architecture and system prototyping. A partner with a vision and value match was crucial to scale and create leadership in this space. We are delighted to find that in KPIT. We are confident that together we will play a key role in shaping the future of the mobility industry."

KPIT 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.

Disclaimer: The stock has been picked from the brokerage report of Goldman Sachs. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.