KPIT Tech warns of a weak Q1 but the Street may have had an inkling

KPIT Technologies on Tuesday said it expects its financial performance for the June quarter (Q1FY27) to fall short of earlier expectations after a sudden slowdown in business from several European automakers, although it remains confident of delivering sustainable, profitable growth in the second half of the financial year.

The company said it expects USD reported revenue to decline around 1% year-on-year in Q1FY27, primarily due to abrupt actions by some European original equipment manufacturers (OEMs) following their recent profit warnings and weaker business outlooks. The impact surfaced only in recent weeks and was not anticipated earlier, the company said.

KPIT added that EBITDA margin and net profit margin are expected to decline sequentially, with profitability likely to be impacted more than revenue as there was little scope to optimise costs within such a short period.

Despite the weak start to FY27, the company said the current disruption is a short-term phenomenon and reiterated that cost-cutting initiatives by global automakers are likely to accelerate outsourcing, offshoring and automation over the longer term. It said this trend has been evident during previous downturns, including the COVID-19 period.

KPIT highlighted continued traction across its products and solutions business, the trucks and off-highway segment, and markets including the US, Korea and India. Growth in the passenger vehicle business is also being supported by new client additions, while technology areas such as autonomous driving, connected vehicles, after-sales solutions and full vehicle design continue to see healthy demand. The company said these growth drivers are backed by a resilient order book and a growing pipeline.

It added that it is implementing AI-led productivity improvements and cost-containment measures while continuing to invest in AI-based products and solutions. The company expects H1FY27 to remain subdued, but sees a recovery in the second half, with strong sequential growth in Q4FY27 laying the foundation for FY28 and beyond.

Also Read: KPIT Tech Q4 Results: Co says FY27 looks more promising than FY26

On Dalal Street, the stock came under sharp selling pressure on Tuesday. KPIT Technologies was the second-worst performer on the Nifty 500 and has declined in eight of the last 11 trading sessions. The stock is down around 42% so far in 2026 and nearly 50% from its 52-week high of ₹1,328.