KPIT Tech shares: MOFSL sees 24% upside post Q2; upbeat on solutions-led shift despite softer margins
For the September quarter (Q2 FY26), KPIT Tech reported revenue of $181 million, up 0.3 per cent quarter-on-quarter (QoQ) in constant currency (CC) terms, marginally ahead of MOFSL's flat growth estimate.
- Nov 12, 2025,
- Updated Nov 12, 2025 1:21 PM IST
Motilal Oswal Financial Services Ltd (MOFSL) maintained its 'BUY' rating on KPIT Technologies Ltd, with a target price of Rs 1,500, implying an upside potential of 23.84 per cent from yesterday's closing price of Rs 1,211.15. The brokerage highlighted the company's ongoing transition towards a solutions-led business model and continued leadership in automotive software as key positives.
For the September quarter (Q2 FY26), KPIT Tech reported revenue of $181 million, up 0.3 per cent quarter-on-quarter (QoQ) in constant currency (CC) terms, marginally ahead of MOFSL's flat growth estimate. The growth was primarily driven by the commercial vehicles segment, which rose 19.3 per cent QoQ, while the passenger car segment declined 1.3 per cent QoQ.
The company's EBIT margin stood at 16.4 per cent, a decline of 60 basis points (bps) sequentially and below MOFSL's estimate of 17 per cent. Profit after tax (PAT) came in at Rs 169.1 crore, down 1.6 per cent QoQ and 17 per cent year-on-year (YoY), missing the brokerage's estimate of Rs 205.1 crore.
For H1 FY26, KPIT's revenue and EBIT grew 10.2 per cent and 8.3 per cent YoY, respectively, while PAT fell 16.4 per cent in rupee terms. MOFSL expects revenue, EBIT and PAT to grow 13.3 per cent, 6.0 per cent and 13.1 per cent, respectively, in H2 FY26.
The brokerage noted that KPIT is currently in a transition phase from a traditional services model to a solutions-led approach, which now contributes about 18 per cent of total revenue, doubling year-on-year (YoY). This shift, MOFSL said, has temporarily cannibalised some legacy revenue streams, resulting in softer near-term growth.
Organic revenue declined 2.2 per cent QoQ in CC terms in Q2, better than the consensus estimate of a 3 per cent decline, partly offset by the CareSoft acquisition. MOFSL expects the impact of this transition to stabilise in the second half of FY26, aided by large deal ramps and improved organic growth.
With an expected EPS CAGR of 14 per cent over FY25–28, MOFSL believes KPIT will continue to outperform peers in the engineering research and development (ER&D) space.
Motilal Oswal Financial Services Ltd (MOFSL) maintained its 'BUY' rating on KPIT Technologies Ltd, with a target price of Rs 1,500, implying an upside potential of 23.84 per cent from yesterday's closing price of Rs 1,211.15. The brokerage highlighted the company's ongoing transition towards a solutions-led business model and continued leadership in automotive software as key positives.
For the September quarter (Q2 FY26), KPIT Tech reported revenue of $181 million, up 0.3 per cent quarter-on-quarter (QoQ) in constant currency (CC) terms, marginally ahead of MOFSL's flat growth estimate. The growth was primarily driven by the commercial vehicles segment, which rose 19.3 per cent QoQ, while the passenger car segment declined 1.3 per cent QoQ.
The company's EBIT margin stood at 16.4 per cent, a decline of 60 basis points (bps) sequentially and below MOFSL's estimate of 17 per cent. Profit after tax (PAT) came in at Rs 169.1 crore, down 1.6 per cent QoQ and 17 per cent year-on-year (YoY), missing the brokerage's estimate of Rs 205.1 crore.
For H1 FY26, KPIT's revenue and EBIT grew 10.2 per cent and 8.3 per cent YoY, respectively, while PAT fell 16.4 per cent in rupee terms. MOFSL expects revenue, EBIT and PAT to grow 13.3 per cent, 6.0 per cent and 13.1 per cent, respectively, in H2 FY26.
The brokerage noted that KPIT is currently in a transition phase from a traditional services model to a solutions-led approach, which now contributes about 18 per cent of total revenue, doubling year-on-year (YoY). This shift, MOFSL said, has temporarily cannibalised some legacy revenue streams, resulting in softer near-term growth.
Organic revenue declined 2.2 per cent QoQ in CC terms in Q2, better than the consensus estimate of a 3 per cent decline, partly offset by the CareSoft acquisition. MOFSL expects the impact of this transition to stabilise in the second half of FY26, aided by large deal ramps and improved organic growth.
With an expected EPS CAGR of 14 per cent over FY25–28, MOFSL believes KPIT will continue to outperform peers in the engineering research and development (ER&D) space.