KPIT Technologies shares plunged 17%: Shares of KPIT Technologies plunged 17 per cent to hit a fresh 52-week low today after the Pune-based company’s profit warning for the first quarter (April to June) of the financial year 2026-27.
The company hit its lowest level since September 19, 2022, while logging its biggest single-day fall in more than six years, the sharpest since March 18, 2020, as per media reports.
European connect behind the fall of stocks
It warned of an expected decline of about one per cent in USD-reported revenues for Q1 FY27 as compared to Q1 FY26, primarily due to “sudden actions by some European OEMs triggered by their recent profit warnings and adverse business outlook”.
Deeming “such sudden actions” as a short-term phenomenon, the company said that in the long run, however, cost-cutting measures by clients would imply more outsourcing and offshoring with more automation led by its products and solutions, which is already indicated by the said clients and evidenced earlier during COVID and similar circumstances.
The update for the financial performance of Q1 FY27 and KPIT’s outlook for the rest of the year was triggered due to recent announcements made by multiple European automakers, as per the filing.
“The company expects the financial performance for Q1 FY27 to be lower than expected previously, due to a sudden drop in revenues in the last few weeks,” KPIT said.
The company, however, said it is confident in its ability to demonstrate sustainable, profitable growth during the second half of the fiscal with a sound sequential quarterly growth in Q4 FY27 to lay a solid growth foundation for FY28 and beyond.
The operating profitability (EBITDA margin) and the net profit margin for Q1 FY27 would decline sequentially, proportionately higher than the revenue fall, as there is no window for cost optimisation during this short period.
The H1FY27 performance would be unsatisfactory, the company admitted, but exuded confidence that the fundamentals of the business remain strong.
“As we had indicated in our communications earlier, there is strong traction in the Products and Solutions business, Trucks and Off-Highway sub-vertical and the 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, and these growth levers are supported by a resilient order book and growing pipeline, it further said.
“We are executing specific AI-led productivity improvement and cost containment measures to establish a firm foundation for an upward margin trajectory. In order to realise the growth opportunities, we continue to invest in AI-led products and solutions,” it said.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
