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Informist, Wednesday, Jul. 29, 2026

 

Please click here to read all liners published on this story

--KPIT Tech: Saw deal wins across geographies in Q1 
--CONTEXT: Comments by KPIT Tech management in post-earnings press call 
--KPIT Tech: Won three new passenger car OEM clients in last six mos 
--KPIT Tech: Aim for continued growth in pdt business 
--KPIT Tech: Believe it will be critical for all OEMs to be present in India 
--KPIT Tech: See stability returing to two large accounts H2 onwards 
--KPIT Tech: EBIT margin to improve QoQ but remain below earlier FY27 aim 
--KPIT Tech: Other accounts partly offset sales drop from 2 large accounts Q1 
 

 

MUMBAI – KPIT Technologies Ltd. expects its earnings before interest and tax margin to improve sequentially from the September quarter but remain below its earlier guidance of 15.6-16.0% for 2026-27 (Apr-Mar), management said in a post-earnings press conference Wednesday. However, the company did not provide revised margin guidance for the current fiscal year.  

 

"(EBIT margin) won't be there because (of) the drop in revenue," Kishor Patil, chief executive officer and managing director, said. "... we are not giving any guidance right now about the EBIT margins for this year. But what we have mentioned is when our revenues go back to where we were, our margins will at least go back to where they were. We will get there." 

 

The company said it is in a position to improve its margins going forward, supported by a favourable revenue mix, growth, and artificial intelligence-led productivity gains. Further, a shift in the company's business model towards outcome-based solutions is also expected to give it an edge going forward, it said. 

 

For the June quarter, the engineering research and development services provider reported an EBIT margin of 12.3%, down 360 basis points from 15.9% in the trailing quarter. Its EBITDA margin for the quarter contracted by 340 bps sequentially to 17.2%.

 

The company's consolidated net profit for the June quarter declined 28% sequentially to INR 1.17 billion and revenue fell 2% to INR 16.75 billion. In dollar terms, the company's revenue for the quarter declined 4.4% sequentially and 0.6% on year to $176.8 million. The on-year fall in dollar revenue, however, was slower than the 1?cline the company had guided to in June, following sudden actions by some European original equipment manufacturers in response to an adverse business outlook. 

 

During the reporting quarter, the company witnessed sharp spending cuts by two of its largest clients in the passenger car segment, one from Japan and one from Germany. Projects from these clients were paused during the quarter, the company said, adding that it did not see any project cancellations as a result. However, the impact of paused projects by these large clients was partially compensated by growth across other accounts, the company management said. 

 

"The revenue drop from two of our largest clients, it was substantial during the ...(quarter). Actually, the entire drop that you see in quarter on quarter... It's twice the size of that... But since the other accounts are growing, it was limited to 4.4%," Sachin Tikekar, joint managing director, said. The company expects revenue from the two large accounts to stabilise in the September and December quarters and see recovery in the March quarter. "We don't expect too much of this kind of a drop from any one of them going forward. It's just that they're going to need some time to stabilise a little bit, Tikekar said.  More 

 

In June, the company highlighted a decline in revenue due to sudden actions by some European original equipment manufacturers. Passenger car equipment manufacturers across Germany, France, the UK, and Japan have announced strict cost-control measures to address business pressures, including profit warnings, pay and job cuts, major write-offs, and ongoing restructuring, the company said in its presentation. The automotive industry as a whole was also affected by increased Chinese competition, US tariffs, and declining profitability, which in turn affected the company. 

 

Going forward, given higher Chinese competition and US tariffs, KPIT Tech believes that it will be critical for European original equipment manufacturers to be present in India and Asia, the management said. "And of course, the only hurdle I would not say... is basically building the ecosystem, strong ecosystem for innovation," Patil said.  

 

Overall, the company expects earnings recovery to begin from the second half of FY27, mainly in the March quarter, the management said. "We believe our focused investments, differentiated capabilities and trusted client relationships position us well to return to stronger growth in H2FY27 (Oct-Mar) and beyond," Patil said in the post-earnings investor presentation. "We have successfully navigated similar industry cycles before and remain confident in our strategy, execution and long-term direction."

 

Going forward, the company said it will focus on broad-based growth in the passenger car segment rather than relying on a few clients for most of its growth. Apart from the two large client accounts where the company saw a pause in projects, it is seeing slight growth across all other existing original equipment manufacturers and the passenger car business, the management said. Further, KPIT Tech added three new original equipment manufacturer clients in the last six months.

 

The company expects healthy growth in its off-highway segments this year and in the coming years. It is actively working to expand its client base in the off-highway and truck segments as well as the passenger car segment, the management said. Further, KPIT Tech expects continued growth in its product business, it said.   

 

During the June quarter, the company saw a sharp decline in revenue from the rest of the world segment, which includes Southeast Asia, India, West Asia, and Africa. This was mainly on the back of a large base in the trailing quarter, which had a large product license deal. So, if you take that (large product license deal) out, on the services and solutions side, we actually had quarter-on-quarter growth, Tikekar said. The company remains confident that it will see further growth in these geographies for the rest of the year. "We continue to be very bullish about our growth prospects in India in the immediate future. And we believe that Southeast Asia will also grow in the years to come," Tikekar added.

 

During the quarter ended June, KPIT Tech reported winning a total contract value of $257 million. This included new deals from across geographies, the management said.  

 

On Wednesday, the company's shares rose as much as 10% intraday after the June quarter earnings announcement but came off the highs to close over 6% higher at INR 638.75 on the National Stock Exchange.  

End  

 

US$1 = INR 95.6475

 

Reported by Arya S. Biju and Shakshi Jain 

Edited by Saji George Titus

 

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