Synopsis: KPIT Technologies, a pure-play automotive software company, expects FY26 EBITDA margins at 21%, driven by ER&D industry tailwinds, CASE/SDV portfolio, geographic and portfolio diversification, and growth in EVs, commercial vehicles, and new tech verticals.
This company is a global technology company with software solutions that will help mobility leapfrog towards an autonomous, clean, smart and connected future is in the focus after the management expects its FY26 EBITDA margin guidance to stand at 21%.
With market capitalization of Rs. 33,240 cr, the shares of KPIT Technologies Ltd are closed at Rs. 1,212.50 per share, increased 2% in today’s market session, making a high of Rs. 1,216.40, from its previous close of Rs. 1,192.90 per share.
Quarter-on-Quarter (QoQ) Performance
In Q2FY26, KPIT Technologies reported sales of Rs. 1,588 cr, up 3.2% from Rs. 1,539 cr in Q1FY26. EBITDA remained stable at Rs. 298 cr, a marginal increase of 1% from Rs. 295 cr. Net profit slightly declined to Rs. 169 cr, down 1.7% from Rs. 172 cr, with EPS at Rs. 6.17, down 1.6% from Rs. 6.27.
Year-on-Year (YoY) Performance
Compared to Q2FY25, sales grew 8% from Rs. 1,471 cr to Rs. 1,588 cr, reflecting steady revenue growth. EBITDA remained nearly flat at Rs. 298 cr from Rs. 297 cr last year. Net profit fell 17% from Rs. 204 cr to Rs. 169 cr, with EPS declining 17% from Rs. 7.43 to Rs. 6.17.
Management Commentary
Sachin Tikekar of KPIT Technologies highlighted that global tariffs are stabilizing and the company is building a solid business pipeline. He expects stronger performance in H2 compared to H1, with margins maintained despite slower growth. KPIT has added business worth Rs. 60–65 cr and anticipates balanced growth across its three geographies.
The US business is expected to grow by next year, while Asia is seen driving the next phase of growth. Additionally, the EV segment now contributes 30% of the company’s total business.
Guidance
KPIT Tech’s management has provided a cautiously optimistic outlook for FY26, expecting steady to slight growth in Q3 despite rising industry costs, while planning to maintain stable EBITDA margins, reflecting effective expense management. Looking ahead, the company is more bullish for Q4, anticipating a gradual yet substantial recovery in growth, though not sharply. Overall, KPIT Tech has reaffirmed its full-year EBITDA guidance at 21%.
Investment rationale by ICICI securities
Global ER&D spend is rising, with India’s share expected to grow from 17% (FY23) to ~22% (FY30). KPIT’s pure-play automotive focus and CASE/SDV-aligned portfolio position it to benefit from this structural growth; US$ revenue projected to grow at ~12.8% CAGR over FY25‑28E.
KPIT is expanding into commercial/off‑highway vehicles, cybersecurity, semiconductor engineering, and piloting sodium-ion batteries for e-CVs. Geographic diversification (U.S./Europe focus + China strategy) lowers concentration risk and improves resilience against PV downcycles. Stable EBITDA margins (~21%) expected, supported by portfolio and geographic diversification.
KPIT Technologies has secured a large, long-term partnership with European automotive OEMs to support their shift toward software-defined vehicles (SDVs). This multi-million-dollar engagement aims to help these automakers scale their operations, speed up development, and improve efficiency as they roll out next-generation mobility technologies.
The collaboration covers multiple vehicle areas, including infotainment, propulsion, body and chassis, vehicle engineering, middleware, and cloud solutions. KPIT’s platforms, tools, accelerators, and AI-powered solutions will play a key role in accelerating delivery, bringing innovation and faster execution to these global automotive programs.
In conclusion, KPIT Technologies is well-positioned for growth, supported by strong ER&D industry tailwinds, a focused automotive software portfolio, geographic and business diversification, and strategic partnerships with global OEMs. With stable FY26 EBITDA guidance at 21% and expanding presence in EVs, SDVs, and new tech verticals, the company demonstrates resilience and long-term growth potential.
Written by Manideep Appana
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