KPIT reported revenue and EBIT margin in line with our estimates in Q2FY26. Key positives: 1) Management expects growth to stabilise in Q3 (flat to 1% QoQ CC) and pickup from Q4. 2) It won a multi-mn dollar 3-year deal with a European OEM – a large part of this deal is yet to reflect in TCV, 3) shift from services to solution-based selling (18% of revenue), leading to an improvement in profitability. However, the global auto industry’s challenges persist, especially in the US, where OEMs have paused EV & battery programmes and new vehicle production programmes have been pushed ahead by 1-2 years. We cut EPS by 9%/7.5%/6% for FY26/27/28E led by a cut in margin estimates (factoring in higher other expenses, D&A charge due to consolidation of Caresoft and investments in sales) and lower other income.
OutlookWe continue to value KPIT at 30x on 1-year forward EPS of INR 35 to arrive at a revised TP of INR 1,050 (vs. INR 1,200 earlier). Retain REDUCE.
For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
KPIT Technologies_11112025_ICICI SecuritiesDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
