KPIT Technologies Ltd.Navigating Headwinds with H2 Recovery

KPIT Technologies faced a challenging quarter with revenue declining 0.6% year-on-year in USD terms and 3.6% sequentially in constant currency, primarily driven by a 4% decline in the European market.

EBITDA margins compressed to 17.2% from historical levels above 20%, reflecting the revenue pressure. Despite these headwinds, the company secured strong deal wins worth $257 million, driven by connected cars, autonomous vehicles, and aftersales transformation. Management outlined a clear recovery path, expecting H2 to outperform H1 with a return to growth by Q4, driven by the commercial vehicle segment rebounding from Q2, sustained growth in the U.S. market, and expansion in the SIMA region.

The company is actively diversifying its geographic and segment exposure, having opened seven new OEM relationships in off-highway and four in trucks and buses. KPIT reaffirmed its medium-term EBITDA margin target of 22-24% by FY29, supported by a strategic shift toward fixed-price contracts, AI-driven delivery, and products and solutions that command better margins.