KPIT Technologies’ Profit Down by 15.8% in June Quarter

Pune, July 30, 2025: KPIT Technologies Ltd (NSE: KPITTECH, BSE: 542651) reported a standalone net profit of ₹1,719 million for Q1 FY26, down 15.8% year-on-year (YoY) and 29.7% sequentially. This decline was primarily impacted by forex losses and a reduction in other income. EBITDA margin remained stable at 21.0%.

Despite the announcement, the shares of the company rose significantly by 3.41% or ₹41.60, and closed at ₹1,260.00.

Key Financial Highlights (₹ million)

For Q1 FY26, KPIT Technologies reported Revenue from Operations of ₹15,387.61 million, a 12.8% year-on-year growth and a 0.7% sequential increase. EBITDA stood at ₹3,239.06 million, growing 12.4% YoY and 0.3% sequentially. The reported Net Profit, however, declined by 15.8% YoY and 29.7% QoQ to ₹1,718.99 million. EBIT for the quarter was ₹2,610.25 million, representing a 10.8% YoY increase but a 1.5% sequential decline. Other Income significantly decreased by 71.5% YoY and 65.4% QoQ to ₹154.88 million, noting a ₹240.3 million forex loss in Q1 FY26. The company maintained a Days Sales Outstanding (DSO) of 45 days and reported a Net Cash Position of ₹16,220 million, up from ₹15,850 million in the previous quarter.

Segment-Wise Revenue (USD million)

In terms of segment-wise revenue in USD million for Q1 FY26, the Passenger Vehicles segment showed a 3.3% sequential growth and 10.2% year-on-year growth, reaching $145.42 million. Commercial Vehicles experienced a decline of 2.8% QoQ and 5.5% YoY, standing at $26.32 million. Geographically, the US market grew by 5.6% QoQ and 11.6% YoY to $51.87 million. Europe saw a modest 2.4% QoQ growth but a 7.2% YoY decline, ending at $78.83 million. Asia experienced an 8.0% QoQ decline but a significant 40.8% YoY growth, reaching $47.07 million. Cloud Based Connected Services demonstrated strong growth, with an 11.3% sequential increase and an 18.5% year-on-year increase, bringing its revenue to $36.13 million.

Major Developments

Strategic Wins

• KPIT secured $241 million in total contract value (TCV) from new engagements during the quarter.
• Notable wins included AI-led platform validation, connected diagnostics, electric powertrain, and middleware solutions with leading European, American, and Asian OEMs.

JSW Motors Partnership

• KPIT entered a strategic collaboration with JSW Motors to develop a robust software and digital backbone for new energy vehicles (NEVs).
• JSW has committed $3 billion in investments over 5 years, with its first NEV slated for launch in H2FY26.

Headcount Optimisation

• Total headcount declined to 12,545 from 13,253 a year ago, supporting margin stability amid lower hiring.

Management Commentary

Kishor Patil, CEO and MD, said:

“Despite macro challenges, we’ve maintained stable margins. We’re focused on creating India-specific solutions and foresee a stronger H2FY26 led by our top 25 clients.”

Sachin Tikekar, Joint MD, added:

“Our AI-infused mobility solutions, including validation tools and middleware, are driving client productivity. We are optimistic about our deal pipeline heading into the second half.”

Insights For Investors

• Net Profit Under Pressure:
  Q1 FY26 net profit fell 15.8% YoY and 29.7% QoQ to ₹1,719 million due to significant forex losses (₹240.3 million) and a sharp drop in other income (down 71.5% YoY).
• Revenue Growth Intact:
  Revenue from operations rose 12.8% YoY and 0.7% QoQ to ₹15,388 million, supported by robust demand in cloud-based connected services and passenger vehicle segments.
• Operational Resilience:
  Despite margin pressures, EBITDA margin held steady at 21.0%, reflecting strong cost discipline and benefits from INR depreciaton.
• Strong Deal Wins:
  KPIT bagged $241 million in TCV from strategic contracts across electric powertrain, connected diagnostics, AI-driven validation, and middleware systems, indicating future revenue visibility.
• Strategic Partnership with JSW Motors:
  The collaboration to develop digital platforms for NEVs could unlock long-term growth as JSW commits $3 billion in the EV ecosystem.
• Segment & Market Dynamics:
  Passenger Vehicles showed strong 10.2% YoY growth; the US business rose 11.6% YoY, while Europe was weak (-7.2% YoY). Asia posted 40.8% YoY growth despite QoQ softness.
• Efficient Working Capital & Liquidity:
  DSO remained low at 45 days; net cash rose to ₹16,220 million, offering strong financial flexibility.
• Optimised Headcount for Profitability:
  Workforce reduced YoY to 12,545 from 13,253, aiding margin stability and reflecting selective hiring in a cautious demand environment.
• Outlook Positive for H2FY26:
  Management expects improved traction from top clients, a healthy deal pipeline, and rising adoption of AI-driven mobility tech in the second half.

Strategic Outlook

KPIT is accelerating its AI-led offerings and mobility-specific solutions, with a strong emphasis on “India-for-India” and China market initiatives. A notable shift towards fixed-price and solution-led contracts is evident, now accounting for 62.5% of revenue, up from 53.5% year-on-year. Despite forex headwinds and a dip in other income, margins held firm, underscoring a disciplined cost structure.

About KPIT Technologies Ltd:

KPIT Technologies Ltd is a global technology company dedicated to transforming mobility through software-driven solutions. With over 12,000 professionals worldwide, KPIT serves as a trusted partner to automotive leaders. It is listed on both the National Stock Exchange (NSE) under the symbol KPITTECH and the Bombay Stock Exchange (BSE) under the code 542651.

REF: https://www.bseindia.com/xml-data/corpfiling/AttachLive/fc792f5f-1fb0-4c60-b5e9-1a9f2c5b3e7d.pdf

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