Two smallcap stocks touch new highs; have zoomed up to 49% in past 3 months

Shares of information technology (IT) company KPIT Technologies and iron & steel products company Vardhman Special Steels (VSSL) from the S&P BSE Smallcap index touched their respective record highs and rallied up to 6 per cent on the BSE in Friday’s range-bound intra-day trade.

VSSL surged 6 per cent to Rs 403, while KPIT Technologies soared 4 per cent to Rs 913.90 on the BSE in intra-day trade today. Both these stocks have surpassed their previous highs recorded on March 22, 2023. In comparison, the S&P BSE Sensex was up 0.10 per cent at 57,982, at 12:00 PM.

In the past three months, VSSL has zoomed 49 per cent after it reported a strong operational performance in the December quarter due to higher sales of value added products and cost optimization. Revenue grew 11.50 per cent year-on-year (YoY), mainly on account of higher sales volumes coupled with better realizations.

VSSL is one of India’s leading producers of special steels, catering to diverse requirements of automotive, engineering, tractors, bearings and allied industries. The company also takes care of steel requirements of select customers for forging applications in international markets of Thailand, Taiwan, Turkey, Italy, Russia, Germany, Vietnam and Japan.

The company has developed long term relationships with reputed and renowned customers globally, which include corporations such as Toyota, Maruti, Hyundai, Hero Moto Corp, Caterpillar, Hino Motors and Bajaj, among others.

On March 7, the company said it started mass production of steel for forging companies of Aichi Steel Corporation (ASC) based in South East Asia for some grades that the company had received approvals.

VSSL said the sales of these products for FY24 will be 10,000 MT approx. This will further increase with the receipt of more approvals in the next 2-3 years. The management said this will establish VSSL and India as a supplier of high-quality automotive steel.

Meanwhile, shares of KPIT Technologies have surged 41 per cent in the past three months as compared to a 3 per cent decline in the S&P BSE Sensex.

KPTI Technologies is a global partner to the automotive and mobility ecosystem for making software-defined vehicles a reality. It is a leading independent software development, and integration partner helping mobility leapfrog towards a clean, smart, and safe future.

The company derives most of its revenue from innovative technology and the scalability of the industry is huge. Automotive manufacturers are prioritizing investment in new age technologies and KPIT is at the forefront of these, according to analysts.

The growth in the mobility & autonomous space is the priority for the customers. As a result, KPIT achieved a mega deal extension of $100 million from Renault. Total contract value (TCV) for the December quarter stands at $272 million.

On March 15, KPIT Technologies announced its partnership with Honda to realize the journey of Honda's Software-Defined Mobility (SDM).

"With Honda's next-generation software architectur and control-safety technology and KPIT's deep domain and software expertise in the areas of Autonomous Driving, Vehicle Electrification, In-Vehicle Infotainment systems and Platform Software, Honda will continue to provide various services and enhanced value to customers around the world in the future," KPIT Technologies had said in a statement.