Skip to content

    KPIT Technologies Q1 FY27 earnings call

    KPITTECH
    Information Technology·29 Jul 2026
    Management Summary

    KPIT Technologies reported a challenging Q1 FY27 with revenue degrowth and profitability impacted by forex losses and Qorix. Despite headwinds in the automotive sector, particularly in Europe, the company secured USD 257 million in deal wins and is executing a broad-based growth strategy across new OEMs, off-highway, and product solutions. Management anticipates a return to growth in H2, led by Q4, with margins improving incrementally, and maintains its FY29 margin aspiration of 22-24%.

    Highlights

    5

    • Deal wins of USD 257 million in Q1 FY27, driven by connected cars, after-sales transformation, and autonomous technologies.

    • Broad-based growth strategy across existing and new OEMs, off-highway, and product/solution offerings.

    • Reaffirmed medium-term aspiration of 22-24% EBITDA margins by FY29, linked to product and solutions growth.

    • US geography demonstrated balanced growth in commercial vehicle and passenger car segments with good visibility for upcoming quarters.

    • Launched N-Dream in-vehicle gaming platform with Tata Motors, a first in India.

    Concerns

    5

    • Q1 FY27 revenue degrowth: 0.1% Constant Currency (CC) YoY growth, 0.6% USD YoY decline, and 3.6% CC QoQ decline.

    • Profitability impacted by forex loss and share of loss from Qorix, with Qorix losses expected to continue for 1-2 more quarters.

    • SDV program cancellations/ramp-downs in Europe and Japan significantly impacted H1 revenues, with full impact expected in Q2 FY27.

    • European market weakness led to a ~4% revenue impact in Q1, with further impact anticipated in Q2 FY27.

    • Degrowth in Q1 was primarily concentrated in the top 2 clients, with the full impact from one client expected next quarter.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue Growth (CC YoY)10%+0.1%YoY
    2. 02Revenue Growth (USD YoY)-60%-0.6%YoY
    3. 03Revenue Growth (CC QoQ)-3.6%-3.6%QoQ
    4. 04EBITDA Margin17.2%
    5. 05EBIT Margin12.3%

    Order Book

    high confidence

    Inflow this qtr

    USD 257 million

    Composition

    Connected Cars(service line)
    After Sales Transformation(service line)
    Autonomous(service line)

    Pipeline

    deal pipeline tcv

    Strong pipeline from existing clients, especially in Europe, with uncertainty on timing of realization.

    Cancellations / Deferrals

    • cancelled:Reduction/cancellation of SDV programs impacting H1 revenues.
    • other:One SDV program from Europe is almost getting over.
    • cancelled:One SDV program in Japan was cancelled at the last minute.

    "Deal wins were strong despite challenging market conditions, but timing of revenue realization from the pipeline remains uncertain."

    Source:
    Prepared remarks

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Revenue Growth (QoQ)
    flattish
    		High
    Revenue
    Revenue Growth (QoQ)
    meaningful growth
    		High
    Revenue
    Revenue Growth (H2 vs H1)
    better than H1
    		High
    Margin
    EBITDA Margin
    22% to 24%
    		High
    Margin
    EBITDA Margin
    return to normal levels
    		Medium

    What to watch in Q2 FY27

    5

    Commercial Vehicle Segment Growth

    next quarter (Q2 FY27)
    CurrentWeakness in Q1 FY27 due to one-time license deal absence.
    TargetGrowth in Q2 FY27.

    Why it matters

    Management explicitly stated expected growth, indicating recovery in a key segment.

    On the commercial vehicle, we will be on for growth next quarter. Actually, this quarter also, there was one specific thing what has happened was a quarter before we had one significant revenue in a particular place. So that's why this looks like this, but I think you will see a growth next quarter.

    Risks & concerns

    6
    RiskSeverity

    Automotive Industry Headwinds

    Extreme competition from China, geopolitical situations, tariffs, and increased input costs are impacting the automotive sector, especially European players, leading to job cuts and profitability challenges. — Management acknowledged

    high

    Revenue Degrowth and Profitability Impact

    Q1 FY27 saw revenue degrowth (0.1% CC YoY, 0.6% USD YoY, 3.6% CC QoQ decline) and PAT was impacted by forex loss and share of loss from Qorix. — Management acknowledged

    high

    SDV Program Cancellations/Ramp-downs

    One SDV program in Europe is ending, and one in Japan was cancelled, significantly impacting H1 revenues and causing uncertainty in timing of further revenue. — Management acknowledged

    medium

    European Market Weakness and Future Impact

    Europe experienced a ~4% revenue impact in Q1, with further impact expected in Q2 FY27. Conversion of strong pipeline to revenue is uncertain due to client re-baselining. — Management acknowledged

    medium

    Qorix Losses

    The share of loss from Qorix is expected to continue for at least another quarter or two, impacting overall profitability. — Management acknowledged

    medium

    Strategic Client Concentration

    The degrowth in Q1 was primarily concentrated in the top 2 clients, with the full impact from one client yet to be seen in the next quarter. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “On the commercial vehicle, we will be on for growth next quarter. Actually, this quarter also, there was one specific thing what has happened was a quarter before we had one significant revenue in a particular place. So that's why this looks like this, but I think you will see a growth next quarter.”

    Clarifies the temporary nature of CV weakness and confirms expected growth next quarter, addressing a key concern.

    asked by Nitin Padmanabhan

    3 min read7 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    KPIT Technologies reported a challenging Q1 FY27 with Constant Currency revenue growth of 0.1% YoY, a USD revenue decline of 0.6% YoY, and a QoQ Constant Currency revenue decline of 3.6%. Profitability was also impacted, with EBITDA at 17.2%, EBIT at 12.3%, and PAT at INR 1.17 billion. These figures reflect a 'more than disproportionate impact on profitability' due to revenue degrowth, exacerbated by forex losses and a share of loss from Qorix.

    02

    Automotive Industry Headwinds

    The global automotive sector is facing significant challenges, including intense competition from China, geopolitical tensions, tariffs, and rising input costs. European players have been particularly affected, experiencing degrowth in the Chinese market, increased competition from Chinese OEMs in Europe, and restricted access to the U.S. market. These factors have led to widespread job cuts and profit warnings across the industry.

    03

    Strategic Growth Initiatives and Deal Wins

    Despite the industry headwinds🌐, KPIT secured USD 257 million in deal wins during Q1 FY27, primarily driven by connected cars, after-sales transformation, and autonomous technologies. The company is actively pursuing a broad-based growth strategy by increasing wallet share with existing OEMs, engaging with new passenger car OEMs in regions like Japan, Korea, and Europe, and expanding its presence in the off-highway and trucks segments, where it has opened seven new OEMs.

    04

    Product and Solution Focus for Margin Accretion

    KPIT is leveraging its product and solution offerings, including Caresoft for cost reduction, N-Dream (in-vehicle gaming), I-Dart (Aftersales Transformation), Technica (validation), and Cymotive (cybersecurity), all powered by the Beacon AI platform. These integrated solutions are expected to drive growth and be margin accretive over time⏳. The company is also exploring opportunities in micro-mobility and Deep Tech, though hydrogen and sodium-ion technologies are long-term investments not expected to yield immediate revenue.

    05

    Outlook and Growth Trajectory

    Management anticipates H2 FY27 to be better than H1, with a return to meaningful growth by Q4 FY27. Q2 FY27 revenues are expected to be flattish. The company maintains its medium-term aspiration of achieving 22-24% EBITDA margins by FY29, driven by product and solutions revenue growth and improved contract margins, which will be achieved incrementally as revenues recover.

    06

    SDV Program and Client Dynamics

    Two significant Software-Defined Vehicle (SDV) programs, one in Europe and one in Japan, are concluding or have been cancelled, impacting H1 revenues. The full impact of these ramp-downs is expected to be reflected by Q2 FY27, with both accounts stabilizing by Q3 FY27. The Q1 degrowth was primarily concentrated in the top two clients, with the full impact from one client expected in the next quarter, highlighting client concentration risk.

    07

    Cost Management and Wage Hikes

    Profitability was affected by forex losses and a share of loss from Qorix, which is expected to continue for another one to two quarters. To manage costs, the company is implementing a phased approach to wage hikes, prioritizing younger grades, and delaying increments for senior personnel. The focus on fixed-price business models, AI usage, and higher-margin solutions is expected to enhance profitability over time⏳.

    This is an AI-generated summary of a publicly available earnings call transcript.