KPIT Tech Q4 Results: Co says FY27 looks more promising than FY26 but stock falls

The recovery seen in shares of KPIT Tech has been swiftly sold into after the company's investor presentation release on Wednesday, May 6, after its March quarter results. The stock is now trading with losses of 5%.

KPIT Tech's FY27 Guidance

KPIT Tech believes that financial year 2027 appears to be more promising than financial year 2026 in terms of revenue growth visibility and the market opportunity.

The company went on to add that two of their largest SDV programs are coming to an end in the first half of this year but the revenue will largely be compensated by growth in newly acquired accounts. Had these programs continued, it would have resulted in 4% to 5% sequential growth, the company stated in its investor presentation.

KPIT Tech also expects "solid growth" from commercial, USA, India, China, Connected Vehicle, Autonomous Driving & Aftersales Transformation. The company expects margins to be between 20.5% to 21.2% for the new year post increased investments in AI, products & solutions, competency development and new markets.

KPIT Tech's EBITDA margin for the quarter narrowed by 60 basis points to 18.8% from 19.4% in the previous quarter.

The company saw an increase in employee benefit expenses during the quarter, which rose to ₹1,047 crore from ₹996 crore in the December quarter.

Net profit for the period increased by 22.6% from last quarter to ₹163 crore from ₹133 crore last year. The base quarter had an impact of ₹59.7 crore due to the new labour codes, which had impacted the profitability.

Revenue for the quarter increased by 5.8% sequentially to ₹1,711 crore from ₹1,617 crore earlier, while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter saw a 2.6% growth year-on-year to ₹322 crore from ₹314 crore earlier.

The guidance for financial year 2027 is still awaited.

KPIT Tech's board has recommended a final dividend of ₹5.25 per share and is subject to approval by shareholders at the upcoming annual general meeting.

KPIT Tech's New Acquisition

KPIT Tech has also announced the acquisition of a strategic stake in Cymotive Technologies Ltd., an Israel-headquartered automotive cybersecurity company.

The initial investment by KPIT Tech will be $10 million in preference capital and the initial transaction will close in mid-June 2026. The initial investment will fetch KPIT Tech a 26% stake in the company, basis achievement of certain performance milestones achieved by Cymotive, latest within eight quarters of the initial investment closing.

KPIT Tech will acquire the remaining stake by mid-2029. Currently, the total consideration for the entire 100% stake is likely to be between $60 million to $120 million.

The acquisition aligns with the company's long-term strategy of creating differentiated, AI solutions-led value for global OEMs.

"This investment also strengthens KPIT's solutions and products strategy, enhancing opportunities to develop reusable platforms and cybersecurity products. It will start adding to product- and licensing-Led revenue streams, in addition to KPIT's established engineering engagements," the company said in its exchange filing.

Shares of KPIT Tech are trading 5.1% lower after the earnings announcement at ₹738.55. The stock is already down 37% so far this year.