Anand Rathi has increased its recommendation for KPIT Technologies to a "Buy" with a target price of Rs 1,760, which is lower than the previous target price of Rs 2,000.

In Q2, the company experienced a 4.7% quarter-on-quarter growth in revenue. The total contract value (TCV) signed in this period was $207 million, which is a 33% increase compared to the previous year. However, the TCV for the last twelve months has declined by 17.5% to $859 million.

Despite a slight decrease in EBITDA margin to 20.8% due to wage hikes and ESOP costs, the management is optimistic about achieving the lower end of its revenue guidance. To support inorganic growth, the company plans to raise Rs 28.8 billion through a 6% equity dilution. The book-to-bill ratio is at 1.2x, and the management has noted a strong deal pipeline. Earnings are expected to improve by 3% in FY25, with the help of a one-time benefit from an insurance claim reversal. The revised target price includes an estimated value of Rs 130 per share from the Qorix joint venture.