KPIT Tech cracks 15% on Q1 earnings warning; stock down 57% from 52-wk high

As per the Q1FY27 business outlook, KPIT Technologies indicated a further deterioration in business momentum versus start of the quarter.

KPIT Technologies share price movement

Share price of KPIT Technologies hit a fresh 52-week low of ₹570.75, falling 15 per cent on the BSE in Wednesday’s intra-day deal after the company’s profit warning for the first quarter (April to June) of the financial year 2026-27. 

The stock price of the information technology (IT) company was quoting at its lowest level since September 2022. It tanked 57 per cent from its 52-week high of ₹1,328.80 touched on September 18, 2025. 

At 09:44 AM, the stock quoted 14 per cent lower at ₹576.30 on the BSE. In comparison, the BSE Sensex was up 0.32 per cent. A combined 9 million equity shares changed hands on the NSE and BSE.

 

Why KPIT share price plunged 15 per cent?

As per the Q1FY27 business outlook, KPIT indicated a further deterioration in business momentum versus start of the quarter. As per the company, the deterioration was largely due to sudden actions by some European OEMs triggered by their recent profit warnings/ adverse business outlook. In addition, management also mentioned that the impact was not seen coming earlier and has been realised only in the recent weeks. 

KPIT in outlook for Q1FY27 and for the remainder of the year said that the company expects the financial performance for Q1FY27 to be lower than expected previously, due to a sudden drop in revenues in the last few weeks. 

KPIT expected decline of around 1 per cent in USD reported revenue for Q1FY27 as compared to Q1FY26 (YoY) primarily due to sudden actions by some European OEMs triggered by their recent profit warnings/ adverse business outlook.  

The operating profitability (EBITDA margin) and the net profit margin for Q1FY27 would decline sequentially, proportionately higher than the revenue decline, since there is no window for cost optimization during this short period, the company said. 

“This impact was not seen coming earlier and has been realized only in the recent weeks. Such sudden actions are a short-term phenomenon. In the long run cost-cutting measures by clients would imply more outsourcing and offshoring with more automation led by our products and solutions, which is already indicated by the said clients and evidenced earlier during COVID & similar circumstances,” KPIT said in an exchange filing.  READ | Poor listing! Waterways Leisure Tourism shares debut 15% below IPO price

Stabilization and Recovery

While the H1FY27 performance would be unsatisfactory, the fundamentals of the company’s business remain strong.  There is strong traction in the Products and Solutions business, Trucks and Off-Highway sub-vertical and US, Korea and India markets. In Passenger Vehicles, growth is also supported by new client acquisitions, KPIT said. 

In terms of technology domains, autonomous, connected, after sales and full vehicle design and engineering show promising traction. These growth levers are supported by a resilient order book and growing pipeline. 

KPIT further said the company is executing specific AI-led productivity improvement and cost containment measures to establish a firm foundation for an upward margin trajectory. In order to realize the growth opportunities, the company said it continues to invest in AI-led products and solutions. 

Meanwhile, KPIT is confident in its ability to demonstrate sustainable, profitable growth during the second half of the fiscal with a sound sequential quarterly growth in Q4FY27 to lay a solid growth foundation for FY28 and beyond.

JM Financial Institutional Securities view on KPIT

Analysts at JM Financial Institutional Securities 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.  

The brokerage firm lowers its FY28–29 estimate by 12–13 per cent and lowers 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,” analysts said. The brokerage firm downgraded the stock with ‘Reduce’ rating and target price of ₹620 per share.  =========================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.