Shares of witnessed one of their worst sell-offs this week after investor sentiment was dented by the company’s weak June-quarter business outlook, making it one of the biggest losers even as the broader market closed higher.
The stock plunged 25% to ₹558.65 apiece, its lowest level since September 2022, wiping out nearly ₹5,061 crore from the company’s market capitalisation. A comparable weekly decline was last seen in mid-October 2024, when the stock had tumbled 23%.
On Tuesday, KPIT Technologies said in an exchange filing that it expects its reported USD revenue for Q1 FY27 to decline by around 1% year-on-year compared with Q1 FY26. In a separate filing on Wednesday, the company said revenue for the second quarter is also expected to remain in a similar range as the first quarter, which further accelerated the sell-off.
The company attributed the to unexpected actions taken by certain European original equipment manufacturers (OEMs). It said the impact of these developments became evident only in recent weeks.
KPIT also expects EBITDA and net profit margins for Q1 FY27 to decline sequentially, with the contraction likely to be proportionately higher than the revenue decline, as there was little scope for cost optimisation over such a short period.
Brokerages slash ratings, cut target prices
Following the company’s warning, domestic brokerage JM Financial downgraded the stock to ‘Reduce’ from ‘Buy’, while cutting its target price to ₹620 from ₹860.
Although the management continues to expect a recovery in H2 FY27, supported by a resilient order book and a growing deal pipeline, the brokerage said the near-term earnings impact and uncertainty around the pace of recovery warrant a more cautious stance.
“In addition, we agree that client pressures will likely lead to more outsourcing in the medium to long run. KPIT remains well positioned to benefit whenever outsourcing increases. However, we believe near-term earnings estimates are susceptible to further downside until clarity emerges,” the brokerage said.
Another domestic brokerage firm, Equirus Securities, also downgraded the stock to ‘Add’ from ‘Long’ and reduced its June 2027 target price to ₹715 from ₹990.
Stock’s prolonged slump continues
The latest sell-off has added to the stock’s pain, as it had already ended each of the last two calendar years in the red. So far in 2026, the stock has plunged 52.35%, taking its cumulative decline over the past three calendar years to nearly 62%.
From its all-time high of ₹1,928 apiece, the stock has now tumbled 71%, marking one of the steepest corrections among recent market favourites.
Retail investors and mutual funds have borne the brunt of the sharp decline, as they collectively held around 34% of the company at the end of the March quarter.
Among the key institutional investors are Canara Robeco Mutual Fund, Mirae Asset Large Cap Fund, and DSP Midcap Fund, according to Trendlyne data.
To be precise, the stock has struggled to regain momentum since touching its all-time high and has ended most of the subsequent months in the red, with February emerging as the worst month after the stock plunged 26%. In just the first three trading sessions of July, the stock has already shed another 17%.
Charts signal sustained bearish momentum, says analyst
Nishchal Jain, Quant Researcher at Share.Market by PhonePe said that from a chart perspective, the stock remains in a strong bearish trend, trading below its key 50-day and 200-day moving averages, indicating sustained selling pressure and weak medium-term momentum.
Jain added that technical indicators such as the RSI are hovering in the lower range, reflecting oversold conditions, but there is still limited evidence of a meaningful trend reversal.
Jain further noted that the stock has fallen nearly 48% from its 52-week high and recently touched fresh 52-week lows, highlighting deteriorating investor sentiment. According to him, immediate support is seen around the ₹500–520 zone, while any recovery is likely to face resistance near the ₹700–750 levels.
Looking ahead, Jain said the stock may witness volatile pullbacks in the near term due to oversold conditions. However, he cautioned that the broader technical structure remains negative unless KPIT sustains above key resistance levels and demonstrates improving business visibility.
Investors are therefore likely to remain cautious until signs of earnings recovery and stronger price action emerge, he added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.