KPIT Tech Shares Jump 8% After BMW Deal Win
Here’s why shares of KPIT Technologies surged in early trade.
Shares of KPIT Technologies Ltd. rose the most in a month after the company said it won an “important strategic large deal” from the BMW Group.
KPIT has been nominated as the single source software integration partner for the next generation 11KW combined charging electronics program powering the upcoming battery electric vehicles of BMW Group, according to an exchange filing. Financial details of the deal, however, weren’t disclosed.
The engagement covers software development, integration and maintenance of combined powertrain coordination unit, including charging control, and extends over several years, the filing said. The execution of this strategic software program will be led by MicroFuzzy, a KPIT Group company, which specialises in vehicle electrification engineering.
MicroFuzzy and KPIT will perform the role of a strategic software partner and will be responsible for complete development, integration, validation and series of software maintenance, the filing said.
“BMW is the largest client for KPIT. We estimate revenue visibility of $45-50 million over the next 4-5 years,” Nitin Padmanabhan of Investec told BloombergQuint over phone. This is the third large deal announced by KPIT Technologies in 2020. “The BMW deal makes it a total of $160 million in total contract value, spread over five years,” he said.
Shares of KPIT Technologies gained as much as 8% to Rs 102 apiece after the announcement. The stock has gained in five of the last seven trading sessions, and is trading near its 50-day moving average of Rs 103.4. apiece
Of the seven analysts tracking KPIT Technologies, five have a ‘buy’ rating and one each suggests a ‘hold’ and a ‘sell’. The average of Bloomberg consensus 12-month target price suggests an upside of 12.8%.