Overview
- On Wednesday, July 1, KPIT said it now expects roughly a 1% year-on-year decline in Q1 FY27 USD revenue after several European original equipment manufacturers sharply cut spending.
- The company warned that both EBITDA and net profit margins will fall sequentially and that earnings will drop by more than the revenue decline because there was no time to implement cost cuts within the quarter.
- Markets reacted quickly with the stock tumbling to a 52-week low and JPMorgan downgrading the shares to Underweight while cutting its target price to Rs 550.
- KPIT described the slowdown as a recent, short-term issue and said it is deploying AI-led productivity and cost measures while continuing investment in products, trucks and off-highway work and growth markets such as the US, South Korea and India.
- Analysts advised against fresh buying in the near term and warned that continuing OEM spending swings and broader IT-sector caution mean investors should watch KPIT's execution and H2 FY27 recovery for signs the company can restore revenue and margins.