KPIT Tech Faces Fresh Selloff As Weak Outlook Sparks IT Sector Worries

KPIT Technologies has issued a weak outlook for the June quarter, expecting a 1% year-on-year decline in US dollar revenue due to slower demand from European automotive clients, particularly BMW. The company also expects sequential declines in EBITDA and profit margins, triggering a sharp selloff in the stock. G Chokkalingam, Founder & MD, Equinomics Research, believes the IT sector is facing three major structural challenges—slower export growth, persistent pricing pressure despite rupee depreciation, and AI-driven disruption. He advises investors to remain selective, as these factors could continue to weigh on earnings, valuations, and the sector's overall growth outlook.