KPIT Tech sees demand recovery signs as OEM spending priorities shift; Q4 likely best quarter of FY26

KPIT Technologies Ltd is seeing a gradual improvement in demand visibility as global original equipment manufacturers (OEMs) recalibrate spending priorities after a prolonged slowdown, according to the company's top management.

In an interaction with Business Today, Sachin Tikekar, Joint MD and Co-founder at KPIT Tech, said the passenger car segment has been under pressure for nearly a year and a half, with OEMs cutting R&D and overall spending by 20–25 per cent during 2025. Despite these sharp cuts, average profitability across OEMs has also declined, prompting companies to become more selective in their investments. Tikekar noted that discussions with KPIT clients have now begun to "take a positive turn".

He highlighted that OEM investments are increasingly focused on high-impact areas such as digital cockpit and in-cabin experiences, Level-3 ADAS (Advanced Driver Assistance Systems) scaling, cybersecurity for connected vehicles and after-sales diagnostics. KPIT, he said, is aligning its offerings to help OEMs execute production programmes "cheaper, better and faster".

On the commercial vehicle side, Tikekar stated that the global truck sales saw a cyclical downturn in 2025, but the company expects a recovery in the second half of 2026. 

Off-highway vehicles have emerged as the most resilient sub-segment, with spending holding up in 2025 and expected to rise modestly in 2026. KPIT aims to pursue more balanced growth by continuing its focus on passenger cars while increasing attention on trucks and off-highway opportunities.

Meanwhile, CFO Priya Hardikar said KPIT's order pipeline stands at around $202 million, providing comfort on near-term revenue visibility. She said the company expects the March quarter (Q4) to be one of its strongest in the current financial year (FY26).

Management also underscored growing traction in AI-infused mobility solutions. Tikekar said KPIT has begun working with key clients on domain-specific AI applications, with early projects delivering promising results. He added that FY27 is expected to be better than FY26.

Meanwhile, shares of KPIT slipped 5.14 per cent to close at Rs 988.95 on Sunday's special trading session.