KPIT Tech Q3 Results: Stock falls after negative organic growth, margins narrow from last year

Shares of KPIT Technologies Ltd. fell as much as 3% on Thursday, January 29, in response to the December quarter results that the company reported.

Net profit for the quarter fell 21% from the previous quarter to ₹133 crore from ₹169 crore. The profitability was impacted due to a one-time impact of ₹59.7 crore due to the new labour code. Adjusted for the same, the profitability figure would have been higher sequentially.

Revenue increased by 1.9% from the September quarter to ₹1,617 crore. The company's revenue growth in US Dollar terms stood at 0.2% sequentially. Growth in constant currency terms stood at 1.5% quarter-on-quarter. Organic growth during the quarter was negative.

KPIT Tech's Earnings Before Interest and Tax (EBIT) declined by 4.5% from the previous quarter to ₹234 crore from ₹246 crore.

EBIT margin for the quarter narrowed by 100 basis points to 14.5% from 15.5% in the September quarter. The fourth quarter will also see an impact on margins due to the wage hikes, which contributed 50 basis points to the margin contraction in the December quarter.

While the company did not provide any specific guidance, it said in its investor presentation that steady deal wins will result in better growth in FY27 compared to FY26.

"Transformative engagements won will contribute to high-quality revenue growth in the medium-term," the investor presentation by KPIT Tech stated.

Shares of KPIT Tech are trading 4.8% lower after the earnings announcement at ₹1,052.8. The stock is down 22% in the last one month.