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Informist, Monday, May 4, 2026

By Shakshi Jain

NEW DELHI – KPIT Technologies Ltd. is expected to post a marginal sequential rise in its adjusted net profit for the March quarter, but it is seen lagging in revenue growth due to investments and salary increments for senior employees, according to analysts. Revenue growth for the quarter is likely to be led by a ramp-up of large deals and some improvement in the commercial vehicles segment, they added. The operating margin of the company is expected to expand marginally on a sequential basis due to the depreciation of the rupee against the dollar during the three-month period.

If analysts' consensus estimates hold, the company's bottom line will return to sequential growth after declining in double digits in the trailing quarter, while the sequential top line growth would be the highest in six quarters.

On a consolidated basis, the digital solutions company is expected to report an adjusted net profit of INR 1.97 billion for the March quarter, according to the average of estimates from 11 brokerages. This implies a near 2% sequential rise, excluding exceptional items. On a year-on-year basis, this implies a decline of nearly 20%. The highest net profit estimate for the reporting quarter is INR 2.31 billion by Dolat Capital Market Pvt. Ltd. and the lowest is INR 1.7 billion by Prabhudas Lilladher Pvt. Ltd.

KPIT Technologies' consolidated top line for the March quarter is expected to rise 4.7% sequentially and almost 11% on year to INR 16.93 billion, according to the average of estimates. The revenue estimates range from a high of INR 17.31 billion by Dolat Capital to a low of INR 16.61 billion by Motilal Oswal Financial Services Ltd.

For the December quarter, the company had reported a consolidated net profit of INR 1.33 billion on revenue of INR 16.17 billion. In the absence of the one-time cost reported for the quarter on account of the new labour codes, the company's bottom line would have been roughly INR 1.93 billion, not including the change in tax.

For the year-ago quarter, the company had reported a consolidated net profit of INR 2.45 billion on revenue of INR 15.28 billion.

"The US market remains patchy, while Asia--earlier a growth lever--has seen volatility recently. Opportunities remain strong in digital cockpit and ICE (internal combustion engine) powertrain segments," Motilal Oswal Financial Services said. 

Kotak Securities said demand in automobile engineering, research, and development services is stabilising but remains below peak levels. ICICI Securities expects the March quarter to be the strongest for the company in 2025-26 (Apr-Mar). "We expect Europe, off-highway and commercial segment to bode well for the company. It is transforming to solutions-based offerings (vs. services based earlier), which should lead to higher customer wallet share," it said.

In dollar terms, the company's revenue for the March quarter is estimated at $184.61 million, based on the estimates from seven brokerages. This is slightly higher than the $181 million reported for the December quarter. The rupee depreciated 6% during the three-month period to 94.83 per dollar as of Mar. 31.

Brokerages expect the company's revenue, in constant currency terms, to grow 1-2% sequentially for Jan-Mar. In the trailing quarter, the company's consolidated revenue, in constant currency terms, grew 1.5% on quarter. The acquired cloud-gaming firm N-Dream and the Caresoft business had accounted for 3.4% of the sequential revenue growth in the December quarter, the company had said. "We see increased traction in trucks and off-highway sub-verticals as we integrate Caresoft operations," the company's co-founder and Joint Managing Director Sachin Tikekar had said.

Brokerages expect KPIT Technologies's total contract value to be broadly stable in the range of $200 million-$250 million for the March quarter. The company had reported a total contract value of $202 million for new engagements won during the December quarter. 

"Management also expects strong 4Q (Jan-Mar) growth as global auto spending has improved and there will be full integration of revenues from the Caresoft and N-Dream acquisitions," Nirmal Bang Equities said.

MARGIN, COMMENTARY

KPIT Technologies' earnings before interest, tax, depreciation, and amortisation, or EBITDA, is estimated at INR 3.5 billion for the March quarter, according to the average of estimates from four brokerages. This would be higher than the INR 3.33 billion reported for the December quarter and INR 3.22 billion registered in the year-ago quarter.

KPIT Technologies' EBIT margin for the reporting quarter is likely to expand 20 basis points from the previous quarter to 15.8%, as per the average of estimates from seven brokerages. "Headwinds will include partial wage hikes, which will be mitigated by reversal of acquisitions-related expenses and stability in depreciation and amortisation," Nirmal Bang Equities Pvt. Ltd. said.

For FY26, the company is likely to report a consolidated net profit in the range of INR 6.5 billion to INR 7.38 billion, as per estimates from three brokerages. This is largely below the net profit of INR 8.4 billion reported in FY25. Its revenue is expected to range between INR 64.04 billion and INR 64.30 billion, slightly higher than INR 58.42 billion reported last fiscal.

Kotak Securities expects the company to guide for 6-8% year-on-year revenue growth in constant currency terms for FY27. 

KPIT Technologies will announce its March-quarter earnings on Wednesday. Market participants will watch out for the management's commentary on the spending outlook among larger clients and the status of new platform development programmes of major original equipment manufacturers, Kotak Securities said. Further, conversion timelines for large engagements, visibility of demand improvement in the US and Asia passenger vehicle business, and levers to sustain profitability amid a challenging demand environment will be in focus.

"We will wait to hear more about the JSW Motors collaboration in terms of revenues and margins. Apart from this, we will see if there has been any improvement in the Asia geography and particularly in Japan as large OEMs (original equipment manufacturers) have been holding back spending," Nirmal Bang Equities said.

On Monday, shares of KPIT Technologies ended 1.3% higher at INR 768.55 on the National Stock Exchange. The stock is down more than 26% since the company reported its results for the December quarter. It is down over 46% from its 52-week high of INR 1,434.5 recorded on Jun. 19.

Of the nine research recommendations on KPIT Technologies available with Informist, four have a 'buy' recommendation on the stock, three have a 'hold', and two have a 'sell' recommendation. The average target price of the 'buy' recommendations is INR 1,393 and that of the 'hold' calls is INR 1,147. This is over 81% and more than 49% higher than Monday's closing price, respectively.

Following are the Jan-Mar earnings estimates for KPIT Technologies from 11 brokerages in descending order of the estimate of net profit:

End

US$1 = INR 95.09

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

Edited by Tanima Banerjee

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