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Informist, Wednesday, Jul. 30, 2025

By Arya S. Biju

MUMBAI – KPIT Technologies Ltd. reported a double-digit sequential fall in its bottom line for the June quarter, as the company's total expenses grew at a faster pace than its sales. This was also the second-largest sequential fall in its bottom line since the company's shares debuted on the stock market in April 2019. Though the company managed to beat analysts' expectations for top line, it failed to meet the Street's estimate for its bottom line. 

The technology company, which provides engineering research and development services to automotive companies, reported a consolidated net profit of INR 1.72 billion, down nearly 30% on quarter and nearly 16% on year. This was below the INR 1.98 billion net profit expected by analysts. Its consolidated revenue for the quarter rose marginally on quarter and nearly 13% on year to INR 15.39 billion, beating analysts' expectations on revenue of INR 15.29 billion. 

Shares of KPIT Tech, which traded 0.1% lower before the announcement of the results, fell further around 2% but later recovered their losses to trade over 5% higher. At 1459 IST, shares of the company traded 4.3% higher at INR 1,271 on the National Stock Exchange. 

The company reported a consolidated earnings before interest, tax, depreciation, and amortisation of INR 3.24 billion, slightly up from the INR 3.23 billion reported in the previous quarter. This was also higher than INR 3.17 billion the Street had estimated. Its EBITDA margin for the reporting quarter was 21.0%, largely in line with the 21.1% reported in the previous quarter as well as the year-ago quarter. During the quarter, the company's margins were supported by operational efficiency and depreciation of the rupee against the dollar, KPIT Tech said in a post-earnings press release.  

However, the company's earnings before interest and tax for the quarter fell 1.5% on quarter to INR 2.61 billion. Its EBIT margin for the reporting quarter contracted 30 bps both sequentially and on year to 17.0%. 

"The performance of Q1FY26 is in line with our expectations and despite macro challenges, we have maintained our EBITDA margins. The mobility industry is going through a lot of fluctuations with geopolitical and tariff-led uncertainties. We believe these will settle down in a quarter," Kishor Patil, chief executive officer and managing director of the company, said in a post-earnings press release. 

The company's other income for the June quarter fell over 65% on quarter to INR 159.6 million as the high base in the previous quarter offset the one-time gain of INR 199.1 million on account of derecognition of assets and liabilities of its joint venture Qorix GmbH and INR 197.2 million on account of transfer of intellectual properties to the said joint venture. During the previous quarter, the company's other income was boosted by a one-time income of INR 271.49 million from the dilution of its stake in Qorix GmbH and a foreign exchange gain of INR 2.99 million. 

The company's total expenditure rose 3.3% on quarter to INR 13.14 billion. This was on the back of an over 2% sequential rise in its employee benefits expense to INR 9.75 billion and a near 6% rise in its other expenses to INR 2.43 billion. During the reporting quarter, employee benefits expense accounted for 74% of the company's total costs while other expenses accounted for 18% of total costs. The company's other expenses included a foreign exchange loss of INR 240.30 million. Its finance costs for the quarter rose nearly 31% sequentially to INR 120 million. Its tax expense fell nearly 11% on quarter to INR 639 million. 

The technology solutions provider booked a total contract value of new engagements worth $241 million for the June quarter, below the total contract value of $280 million reported in the previous quarter. The company saw robust pipeline growth and healthy deal wins in the previous two quarters, it said. Further, the company expects the transformative large engagements won by the company to contribute to revenue growth in the second half of 2025-26 (Apr-Mar).

"Our deal closures have been steady, and the pipeline looks robust, setting the foundation for a healthier H2FY26 (Oct-Mar)," Sachin Tikekar, co-founder and joint managing director of the company, said in the press release.

"Apart from our current clients and markets, which form a major part of our business, we see opportunities in working on India for India Solutions to help our clients address and establish India-specific products. We are optimistic about China as well. We are confident of growth in H2, led by T25 clients and expect to have growth momentum as we exit the year," Patil added. 

In constant currency terms, the company's revenue for the quarter fell 3.2% sequentially. However, on a year-on-year basis, its revenue in constant currency terms grew 4.9%. In dollar terms, its total sales were up 0.3% on quarter and 7.8% on year. 

Revenue from the company's passenger car vertical grew 3.3% on quarter to $145.42 million and revenue from the commercial vehicles segment fell 2.8% to $26.32 million. The company's feature development and integration vertical reported a revenue of $105.79 million, up 1.3% on quarter. Revenue from its cloud-based connected services vertical rose over 11% on quarter to $36.13 million, while revenue from the architecture and middleware consulting vertical fell over 11% on quarter to $35.85 million. Revenue from all verticals barring commercial vehicles increased on a year-on-year basis.

Geographically, revenue from the company's operations in the US led with a 5.6% sequential growth to $51.87 million. Revenue from its operations in Europe grew a little over 2% to $78.83 million, while those from Asia fell 8% on quarter to $47.07 million. 

In rupee terms, revenue from the Americas for the latest quarter grew over 5% sequentially to INR 4.57 billion. Revenue from the UK and Europe also grew over 5% on quarter to INR 7.27 billion. Revenue from the rest of the world, however, fell 5.5% on quarter to INR 7.99 billion.

The company's total employee headcount fell to 12,545 during the June quarter from 12,873 in the previous quarter. It was below the employee headcount of 13,253 reported in the year-ago quarter. 

Apart from the quarterly earnings, the company announced its partnership with JSW Motors to accelerate new energy mobility in India. "We plan to build world-class automotive products in India by integrating the best of technologies from across the globe. KPIT's expertise in software and systems development is a cornerstone of our strategy to deliver best-in-class, technologically-advanced, high-performance, and sustainable vehicles," Ranjan Nayak, chief executive officer of JSW Motors, the newly launched automotive business vertical of the JSW group, said in the press release. 

On Wednesday, shares of the company closed over 4% higher at INR 1,268.50 on the National Stock Exchange.  End

US$1 = INR 87.42

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

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