India’s IT sector is riding a growth wave set off by a pipeline of large deals and strong December quarter results. According to Nasscom, it is set to post revenue of $194 billion in FY21.

Pune-headquartered KPIT Technologies, which provides software solutions for automotive companies, had seen 21% dip in net profit in Q1FY21 and CEO Kishor Patil had assured that the worst was over. In Q3FY21, KPIT’s net profit increased nearly 50% quarter-on-quarter to Rs.417 million, and revenue rose 6.5% to Rs.5.17 billion.

The stock too has gained 347% since the March 2020 low of Rs.34. It hit a 52-week high of Rs.174 this March 10 and now trades at Rs.152. Cashing in, Patil sold shares worth Rs.936 million and his personal holding now stands at 4.86%. Overall promoter holding is now at 40.14%.

Analysts at Chola Wealth Direct believe that deals won during the pandemic will show on the top-line beginning Q4FY21 and have upgraded their rating to ‘buy’ with a target price of Rs.161. “We remain optimistic about long term earnings growth prospects of the company given its strategic end to end client engagement model, healthy cash reserves, zero debt status and traction seen in spending by auto makers to build new tech capabilities,” they state.

Analysts at Anand Rathi Securities believe the company will see margin expansion due to higher utilisation. “We expect the FY23 Ebitda margin (16.6%) to surpass that in FY21 (14.9%),” their report states and maintains a ‘hold’ rating with revised target price of Rs.160.

Meanwhile, mutual funds have increased their holding from 12.31% to 13.05% for Q3FY21--Sundaram MF increased its holding from 1.74% to 1.79%, while Nippon India MF and IDFC MF have the largest chunks with 4.04% and 2.27%, respectively.

However, FPIs have trimmed their stake from 21.82% to 20.74%. Acacia holds a third of that with 7.61% while MIT has the next biggest with 3.11%.