KPIT's fundamentals strong; good time to buy the stock: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his view on KPIT Technologies.

ET Now: How do you think traders or investors will approach midcap IT space because three or four IT firms have given warnings. But, at Rs 180, KPIT would be trading at what 10 times its FY16E earnings. Does it make that stock cheap or would you wait for affirmation of positive guidance for the next quarter, before you take a call?

Deven Choksey: I am completely surprised, the stock which is basically having huge amount of potential — the firm's breakthrough product Revolo is likely to find the original equipment (OE) takers — should have performed well. But, unfortunately, the firm has cut its guidance and that too largely due to the cross-currency headwinds in the global markets. They company has maintained its guidance on the muted lines.

I do not think fundamentals of the company is changing beyond a point, at least on a quarter-on-quarter basis. If one is to looking at this kind of company, one would probably get opportunities in this kind of fall in the market.
If you expect that this stock may give you 25-30 per cent kind of a decent return over a period of time, it is good time to buy at Rs 180-odd levels. If it goes down further it would be better. It is because such a situation would happen only in corrections like this. Certainly, consider this is a good opportunity to buy at lower levels because the fundamentals I really believe for this company are strong.