I don’t think the fall in stock price has anything to do with fund raising. When the company is trading at such high valuations, a miss in earnings can easily bring down the stock by 10-15% in a day or two. If you look at the commentary of management also, they are acknowledging the slow down in Auto in Europe and they expect it to continue even in Q3.
We need to understand that KPIT got higher valuations due to delivering results Q after Q. Now when the growth slows down, the valuations will revert. Also one has to understand that KPIT is a focused ER&D player only on Mobility. What worked in their favor (compared to diversified players) during tailwinds will exactly work against them during headwinds.
Disc – Not invested.
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