Analyst Concall
KPIT Tech charts turnaround via pivot to solutions-led model
This story was originally published at 22:18 IST on 30 January 2026
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--KPIT Tech: See wallet share gains from pivot to solutions-led offerings
--CONTEXT: Comments by KPIT Tech management in post-earnings analyst concall
--KPIT Tech: European OEMs moving spends to India from local vendors
--KPIT Tech: Profitability will improve in Q4 versus Q3
--KPIT Tech: See new solutions driving high quality growth in medium term
--KPIT Tech: See better margins, higher market share in medium term
--KPIT Tech: Q4 will be better than first three quarters of FY26
--KPIT Tech: See sales growth coming back in Asia in next 2-3 quarters
--KPIT Tech: See interest, depreciation costs stablising going ahead
By Arya S. Biju and Shakshi Jain
MUMBAI – KPIT Technologies Ltd. expects to see better margins and higher market share in the medium term as it pivots from being a primarily services company to a solutions company, Kishor Patil, chief executive officer and managing director of the company, said in a post-earnings call with analysts and investors Friday. The engineering, research and development company will be working on making this shift in the next 12-18 months and over the following years it expects this to drive "high quality growth" for the company, Patil said.
"...increase (in) wallet share from KPIT's perspective. And of course, in the midterm...profitable growth. I think these are the two outcomes that we really expect in the midterm as we transition from being primarily a services company to primarily a solutions company," Patil said. "Most of the solutions have been vetted by the clients...some of them are already being piloted during the course of this year and last. So that gives us a lot more confidence," he added.
While the company expects it to take between 12 and 18 months for this transformation, it believes artificial intelligence-related and few other solutions to start in the next three to four months. "...in the next couple of years, we would want the majority of our business to come from solutions," a top company official said.
Going forward, the company expects the March quarter to be better than the previous three quarters of the current financial year. It expects an improvement in its profitability in the March quarter despite its continuing investments. Further, with steady deal wins and a decent deal pipeline, the company expects 2026-27 (Apr-Mar) to be better than FY26.
Thursday, KPIT Tech reported a consolidated net profit of INR 1.33 billion for the December quarter, down over 21% sequentially and nearly 29% on year. The company's bottom line for the quarter was impacted by a one-time cost of INR 597.12 million on account of implementation of the new labour codes. Adjusted for the one-time cost, the company's net profit for the quarter would have been INR 1.93 billion. Its top line for the quarter rose nearly 2% sequentially and over 9% on year to INR 16.17 billion.
During the December quarter, the company's finance costs rose nearly 44% on year to INR 233 million. This marked the third straight quarter of a double-digit sequential rise in the company's finance costs. Expenses related to depreciation and amortisation rose over 8% sequentially to INR 810 million. The company expects both these costs to stabilise going ahead.
The company also expects a revival in sales growth from its operations in Asia in the next two to three quarters. In the December quarter, revenue from Asia operations fell nearly 7% on quarter and over 15% on year to $39.36 million. The company said it is having positive discussions with clients in India, China, West Asia, Southeast Asia, and in certain pockets of Japan and Korea. The company said it is hopeful of achieving some growth in Japan and Korea going forward. With some deals starting to come from China, KPIT Tech expects revenue from this region to grow as well. "...the India and Southeast Asia part will grow. It's been growing for us, and we see a lot more growth," a top company official said. Among other geographies, it has seen most deals coming in from the Europe region, where original equipment manufacturers are moving their spending to India from local vendors, KPIT Tech said.
Friday, shares of the company closed marginally lower at INR 1,041.90 on the National Stock Exchange. End
Edited by Ashish Shirke
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