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Informist, Tuesday, Jul. 28, 2026

By Arya S. Biju

MUMBAI – Ramp-down of large deals coupled with weakness in spending by European original equipment manufacturers is expected to weigh down KPIT Technologies Ltd.'s top line for the June quarter. Meanwhile, weaker sales, lower operating leverage, and higher artificial intelligence-led investments are expected to drag down the company's consolidated net profit for the quarter, according to analysts. 

The company's consolidated net profit for the June quarter is expected to decline nearly 1% sequentially to INR 1.62 billion, according to the average of estimates from 12 brokerages. On a year-on-year basis, the metric is expected to fall 6%. 

The highest estimate for the company's net profit for the June quarter is INR 2.20 billion from Motilal Oswal Financial Services Ltd. The brokerage expects the company's bottom line to improve sequentially, supported by operational efficiencies and a higher mix of fixed-price work. On other hand, Equirus Securities Pvt. Ltd. has the lowest estimate of INR 1.27 billion for the company's net profit. It expects weaker sales and costs related to continued investments to take a hit on the bottom line. 

KPIT Tech's consolidated revenue for the quarter is expected to be INR 16.86 billion, down around 1.5% sequentially but up 9.6% on year, according to estimates. If the estimate holds, this will mark the first sequential decline in the company's top line in 23 quarters. The highest estimate for the company's top line for the quarter is INR 17.40 billion from ICICI Securities Ltd. and the lowest of INR 16.59 billion is from 360 ONE Capital Market Pvt. Ltd. 

In constant currency terms, the company's revenue for the June quarter is expected to decline 0.8-4.3% sequentially, according to estimates from six brokerages. As opposed to others, Nirmal Bang Equities Pvt. Ltd. expects the company's revenue in constant currency terms to increase 1.5% sequentially on "consistent order signings for the past 9 quarters and second-highest quarterly TCV (total contract value) on record in 4Q."

In dollar terms, the company's revenue for the quarter is expected to fall over 3% sequentially to $178.9 million, according to the average of estimates from nine brokerages. This will mark the first sequential fall in the company's dollar revenue in six years. In the March quarter, the company had reported revenue of $185 million. 

In June, the company had said its revenue for the quarter ended June will likely decline about 1% year-on-year in dollar terms, primarily due to sudden actions by some European original equipment manufacturers, triggered by an adverse business outlook. The net profit and operating profit margin for the quarter are also likely to decline sequentially, and in a higher proportion than the revenue decline, as there was no window for cost optimisation during this short period, the company said in an exchange filing.

The company's earnings before interest, taxes, depreciation, and amortisation for the quarter are expected at INR 2.82 billion-INR 3.56 billion, according to three estimates. Its EBITDA margin for the quarter is expected to be 18.3-20.7%. In the March quarter, the company had reported an EBITDA of INR 3.53 billion and an EBITDA margin of 20.6%. 

Earnings before interest and tax margin for the June quarter are expected to decline 100-390 basis points on quarter to 12.0-14.9%, according to estimates from 10 brokerages. "Margins are expected to decline 380 bps owing to absence of meaningful cost optimisation window given sharp demand deterioration in a short period," JM Financial Institutional Securities Pvt. Ltd. said. Motilal Oswal, on other hand, expects the company's EBIT margin to improve around 10 bps on quarter to 16.0%, supported by operational efficiencies and a higher fixed-price work. 

KPIT Tech's total contract value for the June quarter is expected at $200 million-$250 million, according to estimates from two brokerages. "We expect deal win TCV (total contract value) to remain healthy but much lower than 4QFY26 considering certain large deal wins in 4QFY26," Equirus Securities said. In the March quarter, the technology services company reported total contract value of new deals of $349 million. 

The company will announce its June quarter earnings Wednesday. Market participants will watch out for management's comments on the demand environment, sales and margin outlook for 2026-27 (Apr-Mar) and deal pipeline. Updates on any large client specific issues, especially in Japan and Europe given the ongoing volatile macroeconomic environment will also be monitored by the Street. 

Management's comments on shift in demand, reprioritisation of programs, conversion timelines for large engagements with new original equipment manufacturers and updates on paused or cancelled projects will also be closely watched by the Street, analysts said. Updates on integration of its recent acquisition of the engineering solutions business of CareSoft and its synergies will also be monitored, they said. 

Monday, shares of KPIT Tech closed 0.3% higher at INR 585.20 on the National Stock Exchange. The stock is down over 22% since the March quarter earnings announcement and 70% below its all-time high of INR 1,928.7 hit on Jul. 12, 2024. 

Of the 11 research reports on the company available with Informist, seven have a "buy" or equivalent recommendation on the stock, two have a "hold" call and the remaining two have a "sell" call on the stock. The average target price for "buy" calls is INR 928, indicating around 60% upside to Friday's closing price. 

Following are the June earnings estimates for KPIT Technologies from 12 brokerages in descending order of the estimate of net profit in INR billions:

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US$1 = INR 95.91

Edited by Himanshi Gupta

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