1.At a Glance
Welcome to the glamorous yet greasy world ofKPIT Technologies Ltd, where code meets clutch plates and AI meets ADAS. The Pune-based automotive software specialist, with a market cap of ₹32,601 crore, has turned mobility into a high-tech Bollywood plot — full of global expansion, intelligent middleware, European love affairs, and margin melodrama.
For Q2FY26, KPIT clockedrevenue of ₹1,588 crore, up7.9% QoQ, but profits decided to take a pit stop —PAT fell 17% QoQ to ₹169 crore.Operating margins stayed at19%, a respectable but slightly deflated number for a company that preaches digital nirvana.
At ₹1,189 per share, the stock trades at aP/E of 42.1x, richer than most car interiors it helps design. TheROE of 33.2%andROCE of 40.9%are Ferrari-level stats, but recent quarters hint that the engine might need some tuning.
In short: KPIT is driving fast, but the dashboard warning light just blinked “Profit Slip Detected.” Buckle up — this ride’s half-electric, half-ego.
2.Introduction – The Auto Software Rockstar
There are tech companies. There are auto companies. And then there’s KPIT — a coding monk meditating on a car dashboard. Born from the ashes of a Birlasoft demerger, KPIT has evolved into anautomotive software priesthood, preaching the gospel of “software-defined vehicles” to global OEMs who still struggle with USB ports.
With13,000+ “Automobelievers”spread across India, Europe, and the US, KPIT isn’t just selling code — it’s selling transformation. FromADAS and EV softwaretocloud-connected diagnostics, this company sits at the heart of every futuristic car commercial where nobody drives but everyone smiles.
Yet, the stock’s recent -16% 1-year return reminds us that while the future of mobility is electric,the path to profitability still runs on petrol fumes.
As KPIT dives deeper into AI, cloud, and connected ecosystems, it faces the ultimate question: will it become the “TCS of Transport,” or just another overhyped EV influencer stuck in traffic?
3.Business Model – WTF Do They Even Do?
Let’s decode KPIT’s business without needing a PhD in software jargon.
- Feature Development & Integration (62%)– This is KPIT’s bread, butter, and binary. Think of it as writing code that makes cars talk, park, and (sometimes) not crash. This includeselectrification systems, ADAS, and vehicle diagnostics— the modern trinity of automotive coolness.
- Architecture & Middleware Consulting (19%)– The car’s nervous system. KPIT designs the digital plumbing — the middleware and AUTOSAR frameworks that let dozens of ECUs gossip inside your car without fighting.
- Cloud-Based Connected Services (19%)– KPIT’s Wi-Fi playground. It buildsintelligent cockpit systems, digital twins, and cloud diagnostics, the software that makes your car as chatty as your smartphone.
So basically, KPIT is to automakers what TCS is to IT clients — but with more sensors and less patience. The firm’s obsession withsoftware-defined vehicles (SDVs)is paying off, as OEMs rush to outsource everything that beeps, blinks, or brakes.
And for those wondering — yes, this is one of those companies where “cloud-based mobility middleware” sounds important because it is.
4.Financials Overview
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,588 | 1,471 | 1,539 | 8.0% | 3.2% |
| EBITDA (₹ Cr) | 298 | 297 | 295 | 0.3% | 1.0% |
| PAT (₹ Cr) | 169 | 204 | 172 | -17.2% | -1.7% |
| EPS (₹) | 6.17 | 7.43 | 6.27 | -17.0% | -1.6% |
Annualized EPS = 6.17 × 4 =₹24.7, which means aP/E of
48.1x.
KPIT’s Q2FY26 report reads like a racing telemetry sheet — steady speed, stable traction, but overheating profits. Revenue rose, but PAT skidded due to integration costs from its Caresoft acquisition and higher employee expenses.
The message? Growth is cool, but acquisitions aren’t free.
5.Valuation Discussion – Fair Value Range
Let’s do some homework —without turning into those analysts who wear Tesla caps indoors.
(a)P/E Method
EPS (Annualized): ₹24.7Industry P/E: 26.5Fair Value Range = 24.7 × (30 to 36) =₹741 to ₹889 per share
(b)EV/EBITDA Method
EV/EBITDA (Current): 24xIndustry Average: ~18xFY25 EBITDA (Annualized): ₹298 × 4 = ₹1,192 CrFair EV = ₹1,192 × 18–22 = ₹21,456–₹26,224 CrLess Debt (₹529 Cr) + Cash (₹478 Cr) ≈ ₹-51 Cr net→Equity Value = ₹21,500–₹26,200 Cr→ Fair Price Range ≈₹785–₹955 per share
(c)DCF (Discounted Comedy Flow)
Assuming 18% growth for 3 years, then 10% terminal, discount rate 12% — the math screams around₹850–₹1,000.
📘Educational Disclaimer:This fair value range (₹740–₹1,000) is for learning purposes, not your next Multibagger fantasy.
6.What’s Cooking – News, Triggers, Drama
The latest episodes in KPIT’s soap opera:
- Caresoft Acquisition (USD 142–157 Mn):KPIT spent big bucks to acquire Caresoft, a US-based engineering company. Expect ₹11,263 Mn goodwill on the books and probably a few sleepless accountants. The deal boosts KPIT’s presence inChina and commercial vehicles, which sounds great until integration hiccups hit the margins.
- N-Dream Takeover (Switzerland):From 13% to 88.9% stake. A gaming platform in an automotive company — because why not?
- Helm.ai Investment:A $10 Mn SAFE in a Silicon Valley AI startup, proving KPIT wants to be the ChatGPT of cars before ChatGPT itself learns to drive.
- JV with ZF Friedrichshafen:Together they birthedQorix GmbH, focused on open-source automotive middleware — a strategic tech alliance that’s part collaboration, part competitive paranoia.
