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KPKPITTECH

KPIT Technologies Q3 FY26 results (Oct–Dec 2025) and concall

Information Technology · Concall AI · Call held 30 Jan 2026

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

Source transcript

Management summary

KPIT Technologies reported a Q3 FY26 with 1.5% constant currency growth and flat net profit (excluding one-time items). The company is actively transitioning to a solutions-based model, with fixed-price revenue mix increasing to 66%. While deal TCV was muted at $202 million, management anticipates Q4 FY26 to be the strongest quarter for growth and profitability, and expects higher growth in FY27, driven by strategic investments in AI and solutions.

Highlights

  • Constant currency growth for Q3 FY26 was 1.5%.

  • Net profit, excluding one-time Labor Code impact, was INR 1.53 billion, matching last quarter.

  • Cash at quarter-end was INR 9 billion, indicating strong liquidity post-acquisition payouts.

  • Fixed price revenue mix increased to 66% from 59% last year, indicating a shift towards solutions-based contracts.

  • Management expects Q4 FY26 to have the highest quarterly growth and improved profitability for the year.

Concerns

  • Organic growth was negative under 1% for the quarter.

  • Impact of new Labour Code resulted in a one-time post-tax impact of INR 469 million.

  • TCV of deals won was INR 202 million, described as 'muted' for the quarter.

  • Some OEMs are not strategically taking a view on spending, impacting growth in certain pockets.

  • Asia geography (specifically Japan) continues to see ups and downs due to market uncertainty and project delays.

Key financials

3 periods

Headline

  • EBITDA Growth
    0.068 decimal_fraction
  • Organic Growth
    -0.01 decimal_fraction
  • Net Profit (ex-Labour Code)
    1.53 Bncurrency not stated
    QoQ 0%
  • Labour Code Impact (Post-tax)
    469 Mncurrency not stated
  • Fixed Price Revenue Mix
    66%

Q3

  • CC Growth
    0.015 decimal_fraction

FY26

  • YoY Growth (INR)
    0.094 decimal_fraction
  • YoY Growth (USD)
    0.03 decimal_fraction

What they filed

Q3 FY26: revenue up 9.4%, net profit down 28.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26
Revenue1,471 1,478 1,528 1,539 1,588 +8%1,617 +9%
EBITDA297 306 323 295 298 +0%311 +2%
Net profit204 187 245 172 169 −17%133 −29%
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

Inflow this quarter

$202 Mn

Composition

  • Europe (geography)
  • USA (geography)
  • China (geography)

Pipeline

deal pipeline tcv

Pipeline is dependent on OEM budgets and readiness to sign long-term deals, with some deals being over 3-4 years.

The TCV for the quarter was muted, influenced by OEM budget cycles and a reluctance to sign very long-term deals at quarter-end. However, the pipeline includes deals spanning 3-4 years, and the company is seeing traction in Europe, USA, and China.

Source: Prepared remarks

Capital allocation

high confidence
  • M&A Caresoft Acquisition · Integrated · Consideration ₹[object Object] (cash)

    Contributes to growth in Europe and off-highway commercial, adding to capabilities.

    The cash at the end of the quarter is about INR 9 billion after payment of INR 6.3 billion against the payouts of Caresoft and N-Dream during the quarter. ... Overall, if you really look at the growth it was contributed by growth in Europe and off-highway, off-highway commercial.
  • M&A N-Dream Acquisition · Integrated · Consideration ₹[object Object] (cash)

    Small acquisition with high potential, especially in terms of growth and profitability, already in two million vehicles and expected to reach three million next year.

    Already in two million vehicles, and we expect it to be about three million vehicles next year.

    The cash at the end of the quarter is about INR 9 billion after payment of INR 6.3 billion against the payouts of Caresoft and N-Dream during the quarter. ... Also, on N-Dream, which is a small acquisition relatively, we see a high potential in that, specifically both in terms of growth and profitability. And it is already in two million vehicles, and we expect it to be about three million vehicles next year.
  • Liquidity Cash ₹9 Bn Cash balance is after significant payouts for Caresoft and N-Dream acquisitions.
    The cash at the end of the quarter is about INR 9 billion after payment of INR 6.3 billion against the payouts of Caresoft and N-Dream during the quarter.

Guidance & targets

Growth

  • Q4 FY26 Quarterly Growth Growth · Q4 FY26 · High confidence highest quarterly growth in FY26
    One is, we believe that in the last quarter that is Q4, we will improve, our growth will be higher, it will be the highest quarterly growth in FY26.

    — Kishor Patil

  • FY27 Growth Growth · FY27 · High confidence higher than this year (FY26)
    We will for sure grow next year higher than this year.

    — Kishor Patil

Profitability

  • Q4 FY26 Profitability Profitability · Q4 FY26 · High confidence improve from Q3
    And our profitability will improve from what we have in Q3 in spite of our investments.

    — Kishor Patil

  • Margins Profitability · midterm · Medium confidence improve
    But in the midterm, we are very sure that the margins will improve.

    — Kishor Patil

Market Share

  • Market Share Market Share · medium term · Medium confidence increase
    We certainly believe that we can increase our market share in the medium term.

    — Kishor Patil

Costs

  • Depreciation Costs · from here on · High confidence stabilize
    Yes, depreciation line item will stabilize.

    — Priya Hardikar

  • Interest Cost Costs · from here on · High confidence stabilize, more or less in same range
    No, it can lower a little bit, but yes, more or less in the same range.

    — Priya Hardikar

What to watch in Q4 FY26

Q4 FY26 Quarterly Growth

next quarter
Current 1.5% CC in Q3
Target highest quarterly growth in FY26

Why it matters

To verify management's confidence in a strong rebound for the final quarter of the fiscal year.

One is, we believe that in the last quarter that is Q4, we will improve, our growth will be higher, it will be the highest quarterly growth in FY26.

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

Risks & concerns

  • OEM delays in new vehicle programs and spending cuts

    high

    New vehicle programs have been pushed out, and OEMs are cautious with spending, impacting middleware and operating system spend.

    Management acknowledged

  • Slowdown in mobility ER&D budgets

    high

    Overall OEM spend is not likely to go up, with mobility ER&D budgets falling sharply.

    Analyst acknowledged

  • Geopolitical uncertainty and trade deals

    medium

    New tariffs and trade deals impacting OEM spending and supply chain decisions.

    Analyst acknowledged

  • Impact of new Labour Code

    medium

    One-time post-tax impact of INR 469 million and ongoing impact on the industry.

    Management acknowledged

  • Shrinking market in Japan

    medium

    Japan's overall market has shrunk, and OEMs are putting plans on hold, impacting KPIT's business there.

    Management acknowledged

Q&A highlights

5 direct
Solutions-led model: market share gain vs cannibalization Direct
when we provide the holistic solution, we get a much bigger wallet share. So, that's the model that we are applying across the OEMs and the whole purpose is twofold. One is to solve the problem of the OEMs more comprehensively and help them get their vehicles in the production program cheaper, better, faster. At the same time, increase the wallet share for KPIT and also the margins.

Clarifies the strategic intent behind the solutions-led model, emphasizing wallet share gain and improved margins despite potential cannibalization of existing business.

Asked by Karan Uppal

Geopolitical environment and OEM R&D spending Partial
I think the way they are looking at it, they are saving some money, they are investing cautiously in certain areas. Naturally, they are not spending all the money, but that is what is happening in Europe. In USA, we believe that the speed is very important because most of the OEMs in USA are significantly delayed on their vehicle programs and I think that, this is where they are looking for solutions...

Provides insight into how OEMs are reacting to geopolitical shifts, prioritizing cautious spending and seeking solutions to accelerate delayed vehicle programs, especially in the US.

Asked by Karan Uppal

Solutioning strategy: comparison to 2019, reusability, and impact on growth Direct
Now, more and more, as Anup mentioned, this is not about projects. This is about a full solution, which you are giving to the client. And this includes people from client side who are working on this, people from us, there may be some people from other vendors, including some tier ones. So, this is a more holistic solution, which we are giving. So, there is a huge difference. And, we are expecting, I mean, I don't know what over the period will happen, but at least 50%-60% kind of reusability benefit is in most of the solutions.

Explains the evolution of KPIT's solution strategy from 2019, highlighting the shift to holistic solutions with significant reusability (50-60%) and its expected impact on high-quality growth.

Asked by Nitin Padmanabhan

Impact of new Labour Code and Q3 organic growth Direct
So, the first thing is that there is a change in Labour Code which was being discussed for last 3-4 years and it came in last 3-4 months. So, nobody knew when it would hit. It has one time impact and it has an ongoing impact specifically for this industry. So, that is point number one. Point number two, I would say that, I mentioned to you about the overall investments which we will continue to make. And I think we believe that it is very important from the company strategy viewpoint to continue to do that and actually double down on that. We have, and we will do that. Certainly, I would say that in Q3, , we have got a bit short by about a million dollar or so in organic growth.

Addresses the reasons for muted Q3 organic growth, attributing it to the unexpected impact of the new Labour Code and ongoing strategic investments.

Asked by Garvit Goyal

Metrics for tracking solution transformation progress Partial
So, from the services to solutions, the one metric that completely changes is, what becomes most important to us is the revenue per employee. That's something that we also write in our report. That's one of the key measures that not only we track internally, but that's something that makes sense for the analysts and investors also to look at.

Identifies 'revenue per employee' as a key metric for investors to track the success of the company's transition from services to solutions.

Asked by Vimal Jamnadas Gohil

Qorix traction and its relation to solution-based approach Direct
Qorix is both a product and a solution. Typically the complexity of a middleware software is you can never really take it shrink-wrapped. But the attempt is to make it as shrink-wrapped as possible. But whatever you deliver to the customer, there is always going to be an effort in terms of integration, the application software for that.

Clarifies the nature of Qorix as a combination of product and solution, and explains that its traction has been impacted by OEMs pushing out new vehicle programs and reduced spending on middleware.

Asked by Ankit Agrawal

Market share changes and pie shrinkage in mobility Direct
So, basically, if you look at mobility, from passenger car perspective, their spend has gone down by 20% to 25%. It's a dramatic, I think their volumes have gone down substantially, their profits have gone down even more. Except for one or two clients, we have not lost our wallet share in any of our T25 clients. In case of majority, we have actually gained wallet share. So, basically, the pie has shrunk quite a bit and that's the reality at this point.

Explains that while the overall mobility market (pie) has shrunk significantly (20-25% spend reduction), KPIT has largely maintained or gained wallet share with its top clients.

Asked by Vidyadhar Ginde

Japan customer project ending and Honda deal reprioritization Partial
I think that is correct. We will continue to work with them, and there are different programs we are continuing to work with them. And this program is, as other programs it has delayed, so some of the new programs have been a little bit pushed out. And some of these changes are because of that, but we absolutely are strategically in place with OEM. And we will continue to work 2030 and beyond.

Addresses concerns about the ending of a large Japan project and potential reprioritization of the Honda deal, confirming ongoing strategic engagement despite some program delays.

Asked by Rohan Nagpal

2 min read 5 chapters

Detailed narrative

Solutions-based Transformation and AI Focus

KPIT is undergoing a strategic shift towards solutions-based transformation, moving beyond a service-led model. This involves offering holistic solutions with 50-60% reusability, aiming for faster time-to-market and increased wallet share with OEMs. The company has made significant investments, including USD 3.8 million during the quarter (excluding AI and acquisitions), and is focusing on AI with two ongoing production programs.

Partnerships with Microsoft and a leading CRM company for agentic solutions, as well as with Hero Group for micro-mobility, underscore this strategic direction.

Q3 FY26 Financial Performance Overview

For Q3 FY26, KPIT reported a 9.4% year-on-year growth in rupee terms and 3% in US Dollar terms. Constant currency growth for the quarter was 1.5%, with organic growth being negative under 1%. EBITDA grew by 6.8% after absorbing partial increments.

Net profit, excluding a one-time INR 469 million post-tax impact from the new Labour Code, remained flat at INR 1.53 billion compared to the previous quarter. The fixed price revenue mix increased to 66% from 59% last year, indicating progress in the solutions-based model.

Geographical Performance and Outlook

Growth in Q3 was primarily driven by Europe and the off-highway commercial segment. Discussions remain positive across USA, Europe, India, China, Middle East, and Southeast Asia, with some pockets of Japan and Korea showing uncertainty. Japan's market has shrunk, leading to plans being put on hold by some OEMs.

However, KPIT sees significant growth potential in India, Southeast Asia, and the Middle East, and has secured a second win from a Chinese OEM, indicating traction in that market.

Acquisitions and Investments

KPIT completed payouts of INR 6.3 billion for the acquisitions of Caresoft and N-Dream during the quarter, contributing to a cash balance of INR 9 billion at quarter-end. Caresoft is seen as contributing to growth in Europe and off-highway commercial, while N-Dream, though a smaller acquisition, shows high potential with its presence in two million vehicles, projected to reach three million next year.

The company continues to invest in technology leaders for AI and domain expertise to support its solution-based transformation.

Market Dynamics and OEM Behavior

OEMs are facing changing business environments, leading to cautious spending and prioritization of certain technologies. Many are delaying new vehicle programs, impacting middleware and operating system spend. Despite a 20-25% reduction in overall mobility spend, KPIT has largely maintained or gained wallet share with its top 25 clients.

The company believes its solution-backed approach, especially in areas like digital cockpit, cybersecurity, navigation on autopilot, and powertrains, will help OEMs reduce costs and accelerate time-to-market.

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