Market Overview: Global equities saw a solid recovery last week, driven by positive news on several fronts. There were no new tariffs imposed by the U.S., and trade negotiations with China gained traction, alleviating market concerns. Key U.S. macroeconomic indicators, including durable goods orders, manufacturing PMI, and new home sales, showed encouraging improvements. U.S. President Biden also assured continued support for the Federal Reserve Chairman, stabilizing market sentiment.

As a result, U.S. and European indices rallied by around 3%, while Indian markets continued to outperform global peers, benefiting from minimal direct impact from tariff wars. However, geopolitical tensions in Jammu & Kashmir led to sharp selling pressure in Indian markets during the last two trading sessions. Despite this, we expect a relatively stable week ahead, with markets remaining sensitive to any negative news flow and potential volatility.

Recommendation: High-risk traders should focus on selective opportunities and apply strict stop-loss strategies to manage potential risks in a volatile market.

Pick of the Week: KPIT Technologies Ltd

• Current Market Price (CMP): ₹1221
• Target Price: ₹1340
• Stop Loss: ₹1161

Company Overview: KPIT Technologies is a leading provider of software-defined solutions for the automotive sector. Their offerings include advanced systems for electrification, Advanced Driver Assistance Systems (ADAS), body electronics, embedded AI, and digital cockpit solutions. The company recently posted strong Q3FY25 results, and we expect a similarly robust performance for Q4FY25, supported by its diversified revenue streams:

• 50% of revenue from Europe
• 30% from the U.S.
• The balance from emerging Asian markets

Economic activity in Europe and the U.S. is picking up, and the automotive sector, which had been sluggish, is showing signs of recovery. Multiple interest rate cuts in major economies have also provided support. The global transition towards electric vehicles (EVs) is gaining momentum, with over 50 new EV models set to launch in the coming years, further benefiting KPIT. The company has demonstrated a strong track record with a 50% profitability CAGR over the past five years and is expected to continue strong growth through FY26. Additionally, the stock is currently trading below its mean PE multiple, providing a good margin of safety.

Note: KPIT’s quarterly results are expected today. High-risk traders may consider pre-positioning with a strict stop-loss in place ahead of the earnings report.

Technical View: From a technical perspective, KPIT is trading above its key short-term exponential moving averages, indicating strength. Momentum indicators like RSI and TSI have broken out positively, signaling bullish momentum. The stock is down over 30% from its all-time high (July 2024), and relative strength charts suggest the start of a potential recovery.

Momentum Upswing Expected:

• Target Range: ₹1340 – ₹1410

Last Week’s Review: Our previous pick, Federal Bank, showed a marginal increase from the initiation price of ₹195, reaching an intra-week high of ₹205. However, market volatility, triggered by the terrorist attack in Jammu & Kashmir, led to a pullback by the end of the week.

Disclaimer: This recommendation is intended for high-risk traders. Proper risk management and stop-loss strategies should be employed when making trading decisions.

Until then, Happy Trading!

Commodity Samachar Securities
We Decode the Language of the Markets

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