ICICI Securities research report on KPIT Technologies
KPIT Tech did not provide revenue guidance for FY26, acknowledging uncertain demand environment and soft H1. Though it had strong deal TCV of USD 925mn (+16% YoY) in FY25, it is seeing slow deal ramp-up. It expects recently won large deals to ramp up from H2FY26. KPIT is betting big on China (which has disrupted global industry) and believes helping European and US OEMs to catch up with Chinese competition is a new big opportunity. While we believe KPIT may continue to outperform on revenue growth in ER&D pack, there are more downside risks to revenue as global auto industry is challenged due to tariffs, Chinese competition and demand slowdown. We trim revenue growth and margin estimates.
Outlook
We continue to value KPIT at 35x on 1-year forward EPS of INR 37 to arrive at revised TP of INR 1,100. Retain REDUCE.
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