KPIT Tech shares reverse all post-result gains, fall 8% on Axis downgrade

Shares of KPIT Technologies Ltd. fell as much as 8% on Thursday, July 30, reversing all the gains it made on Wednesday after reporting June quarter results that turned out to be better than what the management had warned off, at least on the US Dollar revenue front.

Brokerage firm Axis Capital has downgraded the stock to "sell" from "reduce" earlier and also cut its price target to ₹470 from ₹680 previously. The revised price target implies a downside potential of another 27% from current levels.

KPIT Tech shares have already corrected more than 50% in 2026 so far.

The management in its earnings call stated that the US geography experienced good growth in the commercial vehicle segment, and expects this momentum to continue.

It has also expanded its client base by adding seven new off-highway OEMs and four in the truck and bus business.

European business had a revenue impact of 4% in Q1 and that may continue into Q2 at the regional level as well. "Despite a strong pipeline and healthy client relationships, the timing of when European deals will realize remains uncertain, impacting revenue conversion," the management said, adding that European OEMs are under pressure from Chinese competition and tariffs.

The continent accounts for more than 50% of KPIT Tech's business.

KPIT Tech's management also said that returning to normal margin levels by the fourth quarter is largely dependent on revenue growth, as European cost take-out processes are taking longer.

However, the management remains optimistic that the second half of the financial year will be better than the first half and the CV segment will return to growth in the ongoing quarter.

KPIT Tech reported US Dollar revenue decline of 0.6% on a year-on-year basis, while the management, earlier in July, had warned of a 1% drop.

In constant currency terms, growth declined by 3.6% on a sequential basis, while margins also narrowed in comparison to the previous quarter.

Shares of KPIT Tech are trading 7% lower on Thursday at ₹594.8. The stock is now down 11% in the last one month.