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Friday, Sep 20, 2002

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KPIT Infosystems' rally petering out

K.S. Badri Narayanan

CHENNAI, Sept. 19

KPIT Infosystems, after witnessing a steady rise since the beginning of August, seems to be losing steam. The stock today closed on a weak note, losing over 5 per cent to Rs 119.75 on the BSE after touching an intra-day high of Rs 129.90. Trading volumes also dipped to 8.09 lakh shares against 13.40 lakh shares traded on Wednesday. The stock witnessed a similar trend on the NSE.

The stock has gained over 50 per cent since August 1.

A look at the trading pattern suggests that this rally is not backed by delivery. Today, the deliverable quantity to the actual traded quantity stood at 8 per cent on the NSE. The highest deliverable quantity registered during the month was just 22.71 per cent (on September 3). During July, about 28.09 per cent shares were delivered against the total traded quantity on the NSE.

Even the announcement by the company of its amalgamation with Cummins Infotech at an EGM today did not attract delivery based buying interest.

A look at the shareholding pattern also suggests lack of institutional interest in the stock. As on July 30, 2002, mutual funds held 0.04 per cent. While promoters hold around 40 per cent, friends and associates have 9.7 per cent stake in the company. Other major stakeholders in the company were: Indian public 39.23 per cent and PCBs 8.49 per cent.

The company provides software development, maintenance and implementation services for the banking and finance, consumer packaged goods, engineering and telecommunications software sectors.

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