KPIT Technologies share price fell over 15% to ₹570.80 apiece in Monday’s trading session after the company announced its preliminary business update on Q1 FY27.
The opened at ₹604.40 apiece on NSE today, as compared to previous close of ₹671.55 on Tuesday.
KPIT Technologies Q1 business update
said it expects its reported revenue for the first quarter of FY27 to decline by around 1% year-on-year in U.S. dollar terms compared with the corresponding quarter last year. The company attributed the expected decline to sudden actions taken by certain European original equipment manufacturers (OEMs) after they issued profit warnings and flagged a weak business outlook.
The company said the impact surfaced only in recent weeks and was not anticipated earlier. However, it believes the weakness is temporary, adding that over the longer term, clients’ cost-rationalisation efforts are likely to accelerate outsourcing and offshoring, aided by higher levels of automation enabled by KPIT’s products and solutions. According to the company, clients have already indicated this trend, which was also evident during the Covid-19 period and other similar situations.
KPIT also cautioned that its EBITDA and net profit margins for Q1FY27 are expected to witness a sharper sequential decline than revenue, as the short timeframe left little room for cost optimisation.
While acknowledging that its performance during the first half of FY27 is likely to remain subdued, the company maintained that its underlying business fundamentals remain robust. It highlighted strong momentum in its Products and Solutions business, the Trucks and Off-Highway segment, and across the U.S., Korea and India markets. Growth in the passenger vehicle business is also being supported by new client wins.
The company added that technology areas such as autonomous driving, connected vehicles, after-sales solutions, and end-to-end vehicle design and engineering continue to generate healthy demand. These opportunities are backed by a resilient order book and an expanding deal pipeline.
To improve profitability, KPIT said it is rolling out AI-led productivity enhancement and cost-control initiatives, while continuing to invest in AI-driven products and solutions to capture future growth opportunities.
Looking ahead, the company expressed confidence in delivering sustainable and profitable growth in the second half of FY27. It expects sequential growth by the fourth quarter of FY27, which it believes will lay a strong foundation for growth in FY28 and beyond.
KPIT Technologies share price: Should you buy or sell?
Brokerage firm JM Financial has downgraded the to ‘reduce’, with a new target price of ₹620, seeing an downside potential up to 7.7%.
“We believe the implications extend beyond a muted Q1FY27. More importantly, this pushes the recovery further out and FY27 will likely be a soft year, in our view. We lower our FY28–29 estimates by 12–13% and lower our multiple to 20x FY28E EPS (24x earlier) given muted near-term outlook. We agree that client pressures will likely lead to more outsourcing in the long run, which may benefit KPIT; however, near-term pain will likely continue and earnings estimates are susceptible to further downside, in our view. Hence, we downgrade the stock to REDUCE. KPIT is trading at 21x 1Y forward consensus EPS,” said the firm in a note.
Meanwhile, Harshal Dasani, Business Head – INVasset PMS, believes that KPIT trading at a P/E of 31 with declining near-term revenue is precisely the kind of valuation-fundamental mismatch that resolves through compression rather than expansion.
“Management’s counter is a “strong order book and expanding deal pipeline” supporting a stronger H2 FY27, with the current disruption characterised as temporary. The credibility of that recovery narrative will now depend on Q2 execution rather than commentary alone. The stance on KPIT stays cautious until either the European OEM cycle turns or the multiple compresses to a more defensible zone,” Dasani said.
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