Earnings Outlook
KPIT Tech may see modest rebound; PAT, sales seen up 4% QoQ
This story was originally published at 20:39 IST on 25 April 2025
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By Arya S. Biju
MUMBAI – Ramp up of deals and continued traction in Asia are expected to drive KPIT Technologies Ltd.'s sales in the March quarter. After a weak December quarter, the company is expected to see a rebound with a nearly 4% sequential rise in both the top line and the bottom line. However, the year-on-year growth in both the metrics is expected to be softer compared with the December quarter, with demand uncertainties in the automotive industry continuing to impact the company's performance.
The technology company, which provides engineering research and development services to automotive companies, is expected to post a consolidated net profit of INR 1.94 billion for the March quarter, up 3.8% on quarter, according to an average of estimates by eight brokerage firms. In the December quarter, the company's consolidated net profit had fallen 8.2% sequentially.
Its consolidated revenue for the latest quarter is expected to be INR 15.32 billion, up 3.7% on quarter, an average of estimates by eight brokerages showed. This is against the marginal sequential growth in consolidated revenue reported by the company in the previous quarter. On a year-on-year basis, the company's net profit is expected to rise over 18%, and net sales are expected to rise over 16%. In the December quarter, the net profit grew over 20% and net sales nearly 18% on a year-on-year basis.
JM Financial Institutional Securities Pvt. Ltd. gave the highest estimate for the company's consolidated net profit for the March quarter at INR 2.03 billion and Anand Rathi Share and Stock Brokers Ltd. gave the lowest estimate of INR 1.82 billion. For consolidated net sales, Equirus Securities Pvt. Ltd. gave the highest estimate of INR 15.56 billion, while JM Financial gave the lowest estimate of INR 15.04 billion.
In dollar terms, the company is expected to report a revenue of $177.8 million, up from $176 million in the December quarter. With this, the company is expected to mark the 19th consecutive quarter of revenue growth. In constant currency terms, the revenue is expected to grow in the range of 1.5-3.0% on quarter. ICICI Securities Ltd. expects the company's revenue growth in the quarter to be led by sales in Asia, while revenues from the US and Europe are expected to be weak.
For the March quarter, the company is expected to report earnings before interest, tax, depreciation, and amortisation in the range of INR 3.19 billion to INR 3.29 billion, estimates from three brokerages showed. For the December quarter, the company had reported an EBITDA of INR 3.12 billion.
The company's earnings before interest and tax margin for the March quarter is expected to be in the range of 16.0-17.7%, compared with 17.2% reported in the previous quarter. Brokerage HSBC Global Research expects the company's EBIT margin to improve by 30 basis points on a sequential basis, driven by wage hike absorption and currency benefit. Similarly, Kotak Institutional Equities expects a 30 bps sequential uptick in EBIT margin led by operating efficiencies. Equirus Securities, however, expects the margin to remain flat on quarter with the impact of investments made by the company expected to be partly offset by foreign exchange benefits.
Analysts expect KPIT Technologies to report a healthy order intake in the latest quarter given the indication of a strong deal pipeline by the company's management during the December quarter earnings call. Analysts expect the total contract value of deals to be in the range of $200 million-$250 million. In the December quarter, the company reported a total contract value of $236 million.
GUIDANCE
The technology services company is expected to give a revenue growth guidance of 13-15% in constant currency terms for 2025-26 (Apr-Mar), supported by its strong order book, ICICI Securities said in an earnings preview note. Kotak expects the company to guide for a revenue growth of 13-17% in constant currency terms in FY26. However, PhillipCapital (India) Pvt. Ltd. expects the uncertain demand outlook for global automotive companies and the impact of tariff measures by the US to weigh on the company's guidance for FY26. It expects the company to guide for a 10-14% revenue growth in FY26.
For EBITDA margin, Kotak expects the company to guide for a margin of 20.5-21.5% for FY26. In the December quarter, the company had increased its guidance for EBITDA margin for FY25 to 21% from 20.5% earlier. However, it had retained its revenue growth guidance of 18-22% in constant currency terms for FY25.
The company will announce its March quarter earnings Monday. Analysts expect investors to watch out for management commentary on sales growth and margin guidance for FY26, deal pipeline, order wins, and client decision-making. Management commentary on any major client-specific issues, particularly in light of the ongoing volatile macroeconomic conditions and tariff pressure, will also be monitored, analysts said.
Investors will also focus on the company's progress in diversifying into new sub-verticals, namely trucks and off-highway. Updates on Qorix GmbH, the company's joint venture with ZF group and Qualcomm Ventures LLC., and inorganic initiatives will also be monitored by the investors.
Friday, shares of KPIT Technologies closed at INR 1,221 on the National Stock Exchange, up 0.6%. The stock has fallen nearly 11% since the announcement of its December quarter earnings on Jan. 29 and nearly 37% from its all-time high of INR 1,928.7 hit on Jul. 12.
Following are the Jan-Mar earnings estimates for KPIT Technologies based on reports from eight brokerages, in descending order of the estimate of net profit:
| Brokerage Firm | Net Sales (in INR million) | Net Profit (in INR million) | EBITDA (in INR million) | Revenue (million $) | % EBIT margin |
| JM Financial Institutional Securities Pvt. Ltd. | 15,035.00 | 2,027.00 | 3,188.00 | 178 | 17.7 |
| PhillipCapital (India) Pvt. Ltd. | 15,494.00 | 2,022.00 | -- | 179 | 17.2 |
| Kotak Institutional Equities | 15,278.00 | 1,994.00 | 3,247.00 | 176 | 17.5 |
| HSBC Global Research | 15,403.00 | 1,968.00 | -- | 178 | 17.6 |
| Equirus Securities Pvt. Ltd. | 15,564.00 | 1,909.00 | 3,287.00 | -- | -- |
| ICICI Securities Ltd. | 15,394.00 | 1,899.00 | -- | 178 | 17.5 |
| Choice Equity Broking Pvt. Ltd. | 15,105.00 | 1,881.00 | -- | -- | 16 |
| Anand Rathi Share and Stock Brokers Ltd. | 15,290.00 | 1,818.00 | -- | -- | -- |
| Average | 15,320.38 | 1,939.75 | 3240.67 | 177.8 | -- |
End
US$1 = INR 86.45
Edited by Akul Nishant Akhoury
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