KPIT Technologies (KPITTECH IN) – Q4FY26 Result Update – Near term headwinds to continue amid strategic reset – BUY
Published on 08 May 2026
KPIT’s Q4FY26 performance of 1.8% QoQ CC growth came slightly ahead of our estimate of 1.5%; however, FY26 ended on a subdued note with 1.3% YoY CC growth, impacted by delays in OEM vehicle spends, weakness in middleware programs, and near-term AI-led cannibalization in certain services. However, while outlining its medium-term growth strategy, management remained confident of a demand revival while simultaneously pivoting toward a solutions and products-led model, and reiterated its aspiration to deliver sustainable double-digit growth from FY28 onwards, along with targeting EBITDA margin expansion to 22–24% by 2029, although near-term margins are expected to remain in the 20.5–21.2% range. That said, management acknowledged near-term volatility arising from delayed OEM programs and the completion of two large SDV programs, which are likely to weigh on near-term growth; accordingly, we revise our CC revenue growth estimates to 4.0% and 10.0% for FY27E and FY28E, respectively, from our earlier estimates of 6.4% and 11.0%, while lowering our EBITDA margin estimates to 20.8% and 21.2% from 21.2% and 21.5%, respectively, factoring in sustained investments in technology and R&D. We assign a P/E multiple of 26x (earlier 28x) to FY28E EPS to arrive at a revised target price of INR 880 (earlier INR 1,020) and maintain our BUY rating.
