KPIT Technologies slides 16% on weak Q1 guidance as European automakers cut spending

KPIT Technologies expects a weak Q1FY27 tied to European OEM spending cuts, though it expects H2 recovery. Read more.

July 1, 2026 12:17 IST

KPIT Technology: Q1FY27 financial performance expected to be lower. (Image: AI generated)

KPIT Technologies share price slumped 16% after the weak Q1 outlook. The company stated that Q1FY27 is expected to see around 1% YoY decline in its dollar revenue due to sudden actions taken by some European original equipment manufacturers (OEMs) following their recent profit warnings and weak business outlook.

The company, in its preliminary update for Q1FY27, said that they “expects the financial performance for Q1FY27 to be lower than expected previously, due to a sudden drop in revenues in the last few weeks.” Q2FY27 revenue is also expected in the similar range as Q1FY27.

However, deeming “such sudden actions” as a short-term phenomenon the company remains confident of delivering sustainable and profitable growth in H2FY27.

Q1FY27 EBITDA, net profit margins decline

KPIT Technologies also expects both its EBITDA margin and net profit margin are expected to decline sequentially. KPIT Technologies said that the fall in profitability will be proportionately higher than the decline in revenue as there was no opportunity to optimise costs over such a short period.

Client cost cuts to boost outsourcing: KPIT Technology

KPIT said the impact emerged only in recent weeks and was not anticipated earlier.

The company said that over the long term, cost-cutting by clients is expected to lead to higher outsourcing, offshoring and automation, which could support its business. It added that clients have already indicated this trend, which was also seen during the COVID period and similar situations.

KPIT Technologies sees stronger second half

The company said the H1 FY27 is likely to remain weak but maintained that its business fundamentals are strong.

KPIT said it continues to see strong traction in its Products and Solutions business, the Trucks and Off-Highway segment, and in the US, Korea and India markets. It also said growth in its Passenger Vehicles business is being supported by new client wins.

The company added that technology areas such as autonomous driving, connected vehicles, after-sales solutions, and full vehicle design and engineering continue to see healthy demand. It said these growth opportunities are backed by a resilient order book and a growing pipeline.

KPIT said it is implementing AI-led productivity improvements and cost-containment measures to improve margins while continuing to invest in AI-led products and solutions.

The company said it remains confident of delivering sustainable and profitable growth in the H2FY27. It also expects strong sequential growth in the fourth quarter, which it believes will create a solid foundation for FY28 and beyond.

About KPIT Technologies

KPIT Technologies, headquartered in Pune, is a global technology company focused exclusively on the automotive and mobility industry. It is a leading independent software development and integration partner that helps automakers, suppliers and mobility companies accelerate the transition to software-defined vehicles through embedded software, artificial intelligence and digital engineering solutions.