Inve India ▾
KPKPITTECH

KPIT Technologies Q2 FY26 results (Jul–Sep 2025) and concall

Information Technology · Concall AI · Call held 10 Nov 2025

Company page: KPIT Technologies share price, financials & guidance record

Source transcript

Management summary

KPIT Technologies reported Q2 FY26 results with 4.4% YoY dollar revenue growth and a stable 21.1% EBITDA margin. The quarter saw a significant multi-year deal win from a European OEM, contributing to a positive outlook for future growth. However, the company faced a $65 million revenue reduction from deprioritization and cannibalization, leading to organic constant currency degrowth, and a reduction in reported net profit due to associate losses.

Highlights

  • EBITDA margin maintained at 21.1%, with confidence to sustain for the full year despite upcoming increments.

  • Profits from fully owned business increased from INR 177 crore to INR 191.8 crore.

  • Net cash position remains strong at approximately ₹10.5 billion, with cash generation exceeding ₹160 crore this quarter.

  • Secured a significant multi-year, multi-domain deal win from a European OEM, valued at over $100 million over three years.

  • Client discussions are turning positive, with good traction in autonomous, connected, after-sales diagnostics, cybersecurity, and commercial vehicles.

Concerns

  • Experienced a $65 million reduction in revenue over time, comprising $45 million from customer deprioritization of old programs and $20 million from cannibalization due to holistic solutions.

  • Organic constant currency revenue saw a degrowth of 2.3% quarter-on-quarter.

  • Reported net profit reduction due to increased share of loss from associates (Qorix and N-Dream), with N-Dream's loss impacted by stock option write-offs.

  • Overall DSOs increased to 49 days (from 44 days last quarter) due to the Caresoft acquisition's higher DSOs.

  • OEMs have postponed middleware and architecture re-architecture to a later date, impacting Qorix's revenues and new product development timelines shifted by 1-2 years.

Key financials

  1. YoY Dollar Revenue Growth 4.4% +4.4%YoY
  2. YoY CC Revenue Growth 40% +0.4%YoY
  3. QoQ Dollar Revenue Growth 1.8% +1.8%QoQ
  4. QoQ CC Revenue Growth 30% +0.3%QoQ
  5. Organic QoQ Dollar Degrowth 80% -0.8%QoQ
  6. Organic QoQ CC Degrowth 2.3% -2.3%QoQ
  7. EBITDA Margin 21.1%
  8. Profits from Fully Owned Business ₹191.8 Cr
  9. Net Cash ₹10.5 Bn
  10. DSOs 49 days

What they filed

Q2 FY26: revenue up 8.0%, net profit down 17.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26
Revenue1,471 1,478 1,528 1,539 1,588 +8%
EBITDA297 306 323 295 298 +0%
Net profit204 187 245 172 169 −17%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Execution

over three years

Pipeline

deal pipeline tcv

Total wins and pipeline is pretty strong.

Cancellations & deferrals

  • deferred: Customers deprioritized spend from old programs or moved to products, or similar movement due to discontinuing or delaying programs.
  • cannibalized: Revenue cannibalized because KPIT provided a more holistic solution, leading to initial revenue drop but future additional revenues.
The company experienced a $65 million revenue reduction from deprioritization and cannibalization, which was largely compensated by new deal wins. The overall pipeline is strong with focus on conversion.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Net ₹10.5 Bn
    • New borrowing Working capital loan availed for a short term, contributing to increased interest expenses.
    The overall Net Cash is around Rs. 10.5 billion. During the quarter, there has been, as always, Rs. 160 crore plus cash generation, which is pretty strong. However, we had the payouts in terms of Caresoft acquisition, investment into Helm.ai, and of course, the dividend payment. So, with this, the Net Cash is about Rs. 10.5 billion.
  • M&A Caresoft Acquisition · Integrated

    Helps reduce the cost of the vehicle as well as the manufacturing cost.

    Contributed 800 people to headcount, increased DSOs, and added to depreciation/amortization and notional interest entries.

    At the same time, we have added 800 people from the inorganic Caresoft acquisition. With that, our net addition is about 300 people. So, this is also a part of how we have been able to keep the efficiency and productivity.
  • M&A Helm.ai Investment · Closed

    Related technology that will help improve wallet share and propositions in expanded areas.

    Payouts in terms of investment into Helm.ai.

    However, we had the payouts in terms of Caresoft acquisition, investment into Helm.ai, and of course, the dividend payment.
  • Liquidity Cash ₹10.5 Bn Strong cash generation of over ₹160 crore this quarter, despite payouts for acquisitions and dividends.
    The overall Net Cash is around Rs. 10.5 billion. During the quarter, there has been, as always, Rs. 160 crore plus cash generation, which is pretty strong. However, we had the payouts in terms of Caresoft acquisition, investment into Helm.ai, and of course, the dividend payment. So, with this, the Net Cash is about Rs. 10.5 billion.

Guidance & targets

Revenue Growth

  • Organic Constant Currency Revenue Growth Revenue Growth · Q3 FY26 · High confidence flattish to positive
    We believe that in the Quarter 3, we will be in a position to have a flattish to positive organic constant currency growth and while absorbing the expenses like increments, etc., we will be still around the similar EBITDA margins.

    — Kishor Patil, Co-Founder, CEO, MD

  • Overall Revenue Growth Revenue Growth · Q4 FY26 · High confidence meaningful growth
    In terms of Quarter 4, we do believe that there will be a meaningful growth, which will be coming in. And we believe that it will be mainly on account of the areas which I mentioned earlier.

    — Kishor Patil, Co-Founder, CEO, MD

Profitability

  • EBITDA Margin Profitability · Q3 FY26 · High confidence around 21.1%
    We believe that in the Quarter 3, we will be in a position to have a flattish to positive organic constant currency growth and while absorbing the expenses like increments, etc., we will be still around the similar EBITDA margins.

    — Kishor Patil, Co-Founder, CEO, MD

  • EBITDA Margin Profitability · Full Year FY26 · High confidence 21%
    And we are very confident that what we have talked about, that we will be in a position to maintain 21% EBITDA for the full year.. That would be considering the fact that we will be giving increments, some in next quarter and some in the quarter after. So, after giving that, I think we will be in a position to maintain our EBITDA margins at 21% for the whole year.

    — Kishor Patil, Co-Founder, CEO, MD

Deal Execution

  • European OEM Deal Value Deal Execution · over three years · High confidence in excess of three digits (USD million)
    But right now, I would say, put it as a three digit number over three years.

    — Kishor Patil, Co-Founder, CEO, MD

  • European OEM Deal Start Deal Execution · Q4 FY26 · High confidence Q4 FY26
    But at the same time, I would say, we will be in a position to start the project in Q4 and then scale up in the next year.

    — Kishor Patil, Co-Founder, CEO, MD

New Technology

  • Sodium-ion Royalties New Technology · after 2 years · High confidence start after two years
    So, the meaningful production will start after two years. And that is when we start getting the royalties.

    — Kishor Patil, Co-Founder, CEO, MD

What to watch in Q3 FY26

Organic Constant Currency Revenue Growth

next quarter
Current -2.3% QoQ
Target flattish to positive

Why it matters

To assess if the organic growth trajectory is improving as guided by management after two quarters of degrowth.

We believe that in the Quarter 3, we will be in a position to have a flattish to positive organic constant currency growth and while absorbing the expenses like increments, etc., we will be still around the similar EBITDA margins.

Find out whether KPITTECH delivers this. Inve re-checks your case every morning.

Risks & concerns

  • Revenue reduction from customer deprioritization and cannibalization

    high

    Experienced a $65 million reduction in revenue ($45M from deprioritization, $20M from cannibalization) over time, impacting current quarter's organic growth.

    Management acknowledged

  • Fluctuating revenues and losses from associates (Qorix, N-Dream)

    medium

    Qorix revenues are cyclical and were postponed this quarter; N-Dream saw increased losses due to write-offs, impacting reported net profit.

    Management acknowledged

  • Increased DSOs due to Caresoft acquisition

    medium

    Overall DSOs increased to 49 days, primarily due to Caresoft having higher DSOs, which will take time to align with KPIT's system.

    Management acknowledged

  • OEMs postponing middleware and architecture programs

    medium

    OEMs have moved re-architecture of middleware and new product development timelines by 1-2 years, impacting realization of certain revenues.

    Management acknowledged

Q&A highlights

7 direct
KPIT's competitive edge and strategy for sustained leadership Direct
One is that we knew about software defined vehicles, which a lot of people use the word but KPIT has been pioneering that and has the largest number of programs. I still believe it is a meaningful part where clients have multiple years to get there. Not only that, it has become more important because of the introduction of Al and multiple technologies specifically in autonomous area. And with some of these investments, we believe that we will be in a position to maintain our leadership.

Analyst questioned how KPIT maintains its edge against new tech players; management highlighted pioneering software-defined vehicles, AI investments, and expertise in vehicle architecture as key differentiators.

Asked by Sucrit D. Patil

Maintaining profitability amidst growth slowdown and rising costs Direct
I think, first is the approach we are talking of the solutioning that allows us to really improve our realization. That is the most important part. The second is, I think we always like to be on a cutting edge of the technology and the solutions. That also improves our realization. And I talked about Al which will really improve productivity and efficiency not only in our software development, but also for the client.

Questioned KPIT's strategy to sustain margins; management emphasized solutioning, cutting-edge technology, and AI-driven productivity as key drivers for realization and efficiency.

Asked by Sucrit D. Patil

Impact of $65 million revenue reduction and future recovery Direct
I do believe that there will be a certain cannibalization which may continue to happen next year as well. But I think our revenue growth based on the solutions will be higher than that. That is how I would put it. Because it is not about just reduction of the spend by the client, which may, if you ask me, may really get more stabilized in next couple of quarters. But the Al-led solutions which we are ourselves bringing, to the client, we believe that it will give us an edge to take higher wallet share of the client, as well as give a more holistic ownership of the programs, that will improve the revenues.

Analyst sought clarity on the $65M revenue impact and recovery timeline; management explained the components (deprioritization, cannibalization) and projected stabilization and future growth from AI-led solutions.

Asked by Nitin

Outlook on Qorix JV and potential inflection points for opportunities Direct
Qorix has become more strategic to us because as I mentioned, some of the very strong differentiators are about building a more efficient architecture which will reduce the time of a vehicle production program to less than 2 years and one of the key part in that is the architecture part and we are building many solutions and Qorix would be one part of that solution and so that is why I think in the medium term, this will become more strategic than what we thought in the earlier stage.

Questioned the strategic importance and future prospects of Qorix given fluctuating revenues; management highlighted its role in building efficient vehicle architecture and its increased strategic value.

Asked by Chandramauli

Impact of macro environment (trade deals) on auto R&D spending and KPIT's growth Direct
I believe in next 2 years the demand for us will come out of current production programs, which are, I would say, not in the best of the health for many clients for multiple reasons. And that is where they are reaching out to KPIT, even the clients where are not currently engaged with. So, that will be one opportunity. The second is the innovation opportunity, which is, I talked about a couple of areas, innovative solutions on autonomous etc.

Analyst inquired about the impact of improving macro conditions on OEM R&D; management indicated demand from struggling production programs and innovation opportunities as key growth drivers.

Asked by Chandramauli

KPIT's role in Mercedes' SDV platform (MB.OS) and other OEM proprietary software moves Partial
I would not comment on a client-specific thing, but we are engaged with Mercedes. We made that announcement sometime back. ... If at all the OEM moves towards an internal architecture, a centralized architecture, it doesn't really impact us? There is no negative impact. In fact, if at all there is a positive impact on us.

Analyst asked about KPIT's involvement in Mercedes' specific SDV platform and the broader trend of OEMs developing proprietary software; management confirmed engagement with Mercedes and stated that such moves are neutral to positive for KPIT.

Asked by Karan

Impact of OEMs deferring EV programs and correlation with KPIT's revenue Direct
Actually, I had mentioned that sometime back. If I may repeat, our revenues are not only EV revenues. I think there is some wrong notion people have. As I said, our revenues are driven by digital cockpit, autonomous programs, then after sales diagnostics, middleware, body and many of these areas,. So, as I said, there are a few areas we are adding, such as cost reduction, cyber security, digital experience etc. And also in the powertrain area, propulsion area, as I mentioned, even if such things happen, I think alternate powertrain by itself is an opportunity for us. So, I mean, I think these things happen and we do not see any big change impact on us because of that.

Analyst questioned the revenue correlation with EV programs given recent deferrals; management clarified that KPIT's revenue streams are diversified beyond EV and alternate powertrains present new opportunities, mitigating significant impact.

Asked by Sushovan

Cannibalization of revenue due to holistic solutions and billing model Direct
These are typically places where there are multiple people, parties engaged including where we come out with a full solution, including other infrastructure, mainly Al-driven solutions. Also, the related infrastructure or ecosystem we need for that kind of a solution. So, especially where, as I mentioned to you, if I can take one example, its is in the validation area where companies typically in the past, have been doing testing or doing it in pockets. And they are not in a position to get the required impact. There we came up with more efficient, holistic, full solution and we have been in a position to take up the full responsibility. And in, some of these, some of the realization will happen in the later part of the program. ... Yes, this will be fixed-price program.

Analyst sought examples of cannibalizing solutions and their billing model; management explained the shift to comprehensive, AI-driven, fixed-price solutions, particularly in validation, which initially reduces revenue but promises future realization.

Asked by Aditi Patil

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Overview

KPIT Technologies reported a mixed Q2 FY26, with overall year-on-year dollar revenue growing 4.4% and constant currency revenue growing 0.4%. However, organic constant currency revenue saw a degrowth of 2.3% quarter-on-quarter. The company maintained a strong EBITDA margin of 21.1% and generated over ₹160 crore in cash, contributing to a net cash position of approximately ₹10.5 billion.

Profits from the fully owned business increased from INR 177 crore to INR 191.8 crore, though reported net profit was impacted by losses from associates.

Revenue Headwinds and Strategic Adjustments

The company experienced a $65 million reduction in revenue over time, attributed to two main factors: $45 million from customer deprioritization of older programs (especially in electrical and middleware across USA, Asia, and Europe) and $20 million from cannibalization as KPIT introduced more holistic, AI-based solutions.

These reductions were largely offset by new deal wins, particularly in digital cockpit, validation, and after-sales diagnostics. KPIT is strategically shifting towards solution-based offerings, which now constitute 18% of overall revenues, more than doubling in the last year.

Profitability and Talent Management

KPIT is confident in maintaining its 21% EBITDA margin for the full year, even with planned increments in the coming quarters. The company's talent strategy involves re-evaluating competencies for the shift to solutions and AI readiness, leading to a net addition of 300 people (800 from Caresoft acquisition offset by a reduction of 500 in existing business where competencies were not aligned).

This approach aims to enhance efficiency and productivity while maintaining one of the lowest attrition rates in the industry.

Associate Performance and Working Capital

The reported net profit was affected by increased losses from associates, specifically Qorix and N-Dream. Qorix experienced fluctuating revenues, with some expected revenues postponed to the next quarter, partly due to OEMs delaying middleware re-architecture. N-Dream's losses were exacerbated by write-offs of stock option costs.

The company's overall DSOs increased to 49 days from 44 days last quarter, primarily due to the higher DSOs of the recently acquired Caresoft, which management expects to normalize over time.

Future Outlook and Strategic Growth Areas

Management noted a positive shift in client discussions, with improved stability regarding tariffs and geopolitical issues. KPIT sees strong opportunities in autonomous, connected, after-sales diagnostics, cybersecurity, and commercial vehicles. Geographically, Europe, India, and China show good traction, with the US commercial vehicle segment expected to grow.

The company plans to expand into new verticals like industrial/manufacturing, micromobility, and defense, leveraging existing investments in technologies like Helm.ai and Caresoft to enhance wallet share and market propositions.

Significant Deal Win and Guidance

A major highlight was a multi-year, multi-domain deal win from a European OEM, valued at over $100 million over three years, which is expected to accelerate future revenues. For Q3 FY26, KPIT anticipates flattish to positive organic constant currency growth with similar EBITDA margins.

A meaningful growth is projected for Q4 FY26, driven by existing deals and current visibility. New product development timelines for OEMs have, however, shifted by 1-2 years.

Summary of a publicly available earnings call transcript; see how call summaries are prepared. Not investment advice.