KPIT Technologies has revised its outlook for Q1FY27 and for the remainder of the year. KPIT said it expects Q1FY27 financial performance to be lower than previously expected due to a sudden drop in revenue in the last few weeks.
“There is an expected decline of 1% in dollar revenues for Q1FY27 compared with Q1FY26 (year-on-year), primarily due to sudden actions by some European OEMs triggered by their recent profit warnings and adverse business outlook,” KPIT said.
Operating profitability and net profit margin for Q1FY27 would decline sequentially at a rate higher than the revenue decline, as there was no window for cost optimisation during this short period, the company said. This impact was not visible earlier and has been realised only in recent weeks, it said.
KPIT expected these sudden actions to be a short-term phenomenon. In the long run, cost-cutting measures would lead to more outsourcing and offshoring, with automation increasingly driven by their products and solutions.
While the H1FY27 performance would be unsatisfactory, the fundamentals of their business remain strong, the company said. There was strong traction in the products and solutions business, the truck and off-highway sub-vertical and demand from the US, Korea and India markets.
In passenger vehicles, growth is also supported by new client acquisitions. In terms of technology domains, autonomous, connected, after-sales and full vehicle design and engineering show promising traction. According to KPIT, these growth levers are supported by a resilient order book and growing pipeline.
KPIT said it was executing specific AI-led productivity improvements and cost-containment measures to drive an upward margin trajectory. It would continue to invest in AI-led products and solutions.
The company expects profitable growth during the second half of the fiscal year, with sound sequential quarterly growth in Q4 of FY27.