Buy KPIT; target of Rs 1350: Motilal Oswal

Buy

Motilal Oswal's research report on KPIT

KPIT Technologies (KPIT) reported revenue of USD181m in 3QFY26, up 1.5% QoQ in CC terms vs. our estimate of 2.8% growth. Growth was led by the commercial vehicles segment, up 10.5% QoQ, while the passenger car segment declined 1.2% QoQ. EBIT margin was 15.6% (down 80bp QoQ), below our estimate of 16.1%. Adj. PAT was up 6.6% QoQ/down 3.5% YoY to INR1,804m (below our est. of INR2,109mn). This excludes the one-time impact of INR469m on account of changes in labor laws.

Outlook

We expect an EPS CAGR of ~12% over FY25–28, supported by the mix improvement and operating leverage. We reiterate our BUY rating with a TP of INR 1,350 (29% upside), valuing the stock at 33x FY28E EPS.

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