KPIT Tech: Choice maintains 'ADD' rating, sets target price at Rs 1,400 on deal wins, margin outlook
KPIT Tech: The company's consolidated revenue came at $178 million, up 0.3 per cent sequentially, slightly below Choice Institutional Equities' estimate of $179 million.
- Jul 31, 2025,
- Updated Jul 31, 2025 10:10 AM IST
KPIT Technologies Ltd reported a steady set of numbers for the June 2025 quarter (Q1 FY26), with revenue and margins broadly in line with expectations despite a challenging macroeconomic environment. The company's consolidated revenue came at $178 million, up 0.3 per cent sequentially, slightly below Choice Institutional Equities' estimate of $179 million. In constant currency (CC) terms, however, revenues declined by 3.2 per cent quarter-on-quarter (QoQ), indicating near-term pressure on growth. In rupee terms, revenue came in at Rs 1,539 crore, rising 0.7 per cent QoQ.
EBITDA for the quarter stood at Rs 323.9 crore, up 0.3 per cent QoQ and ahead of the domestic brokerage's estimate of Rs 317.4 crore. The EBITDA margin remained steady at 21.1 per cent. However, the company reported a sharp 29.8 per cent QoQ decline in net profit to Rs 171.9 crore, dragged by a Rs 8.1 crore loss on forward contracts.
KPIT secured $241 million worth of new deals, primarily in the powertrain and connected vehicle space across the US and Europe. While commercial vehicle activity remained soft, management remains optimistic about a rebound in the coming quarters. A 20 per cent year-on-year (YoY) expansion in the deal pipeline underscores robust underlying demand, although client reprioritisation and increased focus on solution-based models have delayed execution timelines.
The company anticipates a stronger second half of FY26, supported by stabilising OEM (Original Equipment Manufacturer) spending and growth in key segments like smart cockpits, autonomy features, cybersecurity and validation solutions.
KPIT is also banking on higher growth contributions from India and China, including strategic EV programs like JSW Motors. Europe is expected to lead the recovery, with selective momentum anticipated in the US and Japan.
Choice said that KPIT's revenue from India and China is expected to grow. To protect its margins, the company is moving away from time-based billing and focusing more on fixed-price contracts, which now make up 62.5 per cent of its business.
The brokerage expects the company to post a revenue/EBITDA/PAT CAGR of 13.1 per cent/14.3 per cent/12.1 per cent over FY25–28E, and maintains an 'ADD' rating with a target price of Rs 1,400.
Meanwhile, KPIT Tech shares were last seen trading 2.57 per cent lower at Rs 1,237 on Thursday.
KPIT Technologies Ltd reported a steady set of numbers for the June 2025 quarter (Q1 FY26), with revenue and margins broadly in line with expectations despite a challenging macroeconomic environment. The company's consolidated revenue came at $178 million, up 0.3 per cent sequentially, slightly below Choice Institutional Equities' estimate of $179 million. In constant currency (CC) terms, however, revenues declined by 3.2 per cent quarter-on-quarter (QoQ), indicating near-term pressure on growth. In rupee terms, revenue came in at Rs 1,539 crore, rising 0.7 per cent QoQ.
EBITDA for the quarter stood at Rs 323.9 crore, up 0.3 per cent QoQ and ahead of the domestic brokerage's estimate of Rs 317.4 crore. The EBITDA margin remained steady at 21.1 per cent. However, the company reported a sharp 29.8 per cent QoQ decline in net profit to Rs 171.9 crore, dragged by a Rs 8.1 crore loss on forward contracts.
KPIT secured $241 million worth of new deals, primarily in the powertrain and connected vehicle space across the US and Europe. While commercial vehicle activity remained soft, management remains optimistic about a rebound in the coming quarters. A 20 per cent year-on-year (YoY) expansion in the deal pipeline underscores robust underlying demand, although client reprioritisation and increased focus on solution-based models have delayed execution timelines.
The company anticipates a stronger second half of FY26, supported by stabilising OEM (Original Equipment Manufacturer) spending and growth in key segments like smart cockpits, autonomy features, cybersecurity and validation solutions.
KPIT is also banking on higher growth contributions from India and China, including strategic EV programs like JSW Motors. Europe is expected to lead the recovery, with selective momentum anticipated in the US and Japan.
Choice said that KPIT's revenue from India and China is expected to grow. To protect its margins, the company is moving away from time-based billing and focusing more on fixed-price contracts, which now make up 62.5 per cent of its business.
The brokerage expects the company to post a revenue/EBITDA/PAT CAGR of 13.1 per cent/14.3 per cent/12.1 per cent over FY25–28E, and maintains an 'ADD' rating with a target price of Rs 1,400.
Meanwhile, KPIT Tech shares were last seen trading 2.57 per cent lower at Rs 1,237 on Thursday.