The growing use of technology in automotives is also improving the business case for auto ER&D players. Keeping in mind the strong adoption of software-defined vehicles, Motilal Oswal has initiated coverage on KPIT Technologies, a key tech provider to major auto manufacturers in the country. They have recommended ‘Buy’ with a target price of Rs 1,600, implying an upside of 34%.
Motilal Oswal on KPIT Technologies: Pure play automotive ER&D partner
Motilal Oswal stated that KPIT Technologies is a pure-play automotive ER&D partner focused on enabling SDV (software-defined vehicles) adoption for major OEMs. The company’s core strengths lie in embedded software development, E/E (Electrical/Electronic) architecture, and middleware consulting, accounting for over 80% of its revenue.
The brokerage said that KPIT Tech is well-positioned to capitalise on rising software complexity in vehicles, with strategic relationships across over 25 OEMs and tier-1 suppliers.
Motilal Oswal on KPIT Technologies: Strong growth on financial front
The company’s revenue grew at a CAGR of 18% to $691 million in FY25 from $304 million in FY20 and is projected to reach $1 billion by FY28, clocking a 15% CAGR over FY25-28. EBIT margins are expected to expand from 17.1% in FY25 to 19.0% in FY28, supported by scale benefits and acquisitions like Caresoft, which is expected to contribute 5% to revenue.
All in all, KPIT Technologies’ growth is driven by rising software complexity, accelerating SDV adoption, and vendor consolidation trends among OEMs. The brokerage expects that a turnaround in the automotive investment cycle could lead to an upside to these numbers.
KPIT Technologies Q1 earnings
KPIT Technologies posted a net profit of Rs 171.9 crore for the first quarter of FY26, down 15.8% year-over-year from Rs 204.2 crore in the same period a year ago. Sequentially, the profit fell 29.7% to Rs 244.7 crore.
The company’s revenue from operations rose by 12.7% to Rs 1,538.7 crore in Q1 FY26 from Rs 1,346.6 crore in Q1 FY25. Quarter-on-quarter, the revenue saw a marginal increase of 0.7% from Rs 1,528.4 crore in Q4 FY25.
KPIT Technologies’ earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 323.9 crore, up 12% YoY from Rs 288.1 crore in the year-ago period.