At a Glance
KPIT Technologies just shifted gears with Q1 FY26 results: Revenue ₹1,539 Cr (+12.8% YoY), PAT ₹172 Cr (-15.8% YoY), and margins slightly slipping to 19%. Despite the profit drop, the stock raced 4.3% to ₹1,270, powered by news of a JSW Motors EV software partnership and an acquisition of Caresoft Entities. Market cap is ₹34,827 Cr, P/E a sporty 43. Investors are betting big that KPIT remains the kingpin of the “software-defined vehicle” era.
Introduction
KPIT isn’t your average IT services firm – it’s the nerdy cousin in the automotive world, writing the code that makes your car “smart” (or at least not dumb). With 13,000+ “Automobelievers” (their term, not mine), KPIT builds embedded software for electric, autonomous, and connected vehicles.
Over the past five years, KPIT has delivered 40% profit CAGR, wooing investors. But Q1 FY26 has put a small dent in the narrative: profits fell, margins dipped, and foreign investor interest softened. Is this a temporary speed bump or the start of a slowdown in the EV software party?
Business Model (WTF Do They Even Do?)
KPIT is a pure-play automotive software company offering:
- Embedded Systems – brains behind car electronics.
- AI & Digital Solutions – enabling autonomous driving.
- Software Integration – helping OEMs build software-defined vehicles.
Clients include global auto giants. Revenue is spread across Europe, US, and Asia – basically wherever cars need coding.
Financials Overview
Q1 FY26 Results:
- Revenue: ₹1,539 Cr (+12.8% YoY)
- EBITDA: ₹295 Cr (margin 19%)
- PAT: ₹172 Cr (-15.8% YoY)
- EPS: ₹6.27
FY25 Performance:
- Revenue: ₹6,016 Cr
- PAT: ₹807 Cr
- ROE: 33% | ROCE: 41%
Commentary: While revenue growth continues, profit decline shows margin pressure from higher costs and integration expenses.
Valuation
- P/E Method
- EPS (TTM): ₹29.45
- Industry P/E: ~30
- Fair Price = ₹29.45 × 30 = ₹885
- EV/EBITDA
- EV ≈ ₹34,827 Cr + ₹345 Cr (debt) ≈ ₹35,200 Cr
- EBITDA (TTM): ₹1,221 Cr
- EV/EBITDA ≈ 28.8x
- Fair Price ~ ₹1,050–1,150
- DCF (Growth Play)
- Assume 15% growth, 12% discount → ₹1,150–1,300
🎯 Fair Value Range: ₹1,050 – ₹1,300
At ₹1,270, the stock is fully priced – any slip in growth could hurt.
What’s Cooking – News, Triggers, Drama
- JSW Motors EV Partnership: Big win in the Indian EV software space.
- Caresoft Acquisition: Expands capabilities in vehicle validation.
- EV Boom: Global demand for SDVs rising.
- Risks: High dependence on auto OEM cycles, intense competition.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 5,033 |
| Liabilities | 2,093 |
| Net Worth | 2,712 |
| Borrowings | 345 |
Remarks: Strong net worth, manageable debt. Clean balance sheet.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 462 | 1,002 | 1,390 |
| Investing | -167 | -561 | -630 |
| Financing | -183 | -240 | -342 |
Remarks: Robust operating cash, heavy reinvestment in growth.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 33.2% |
| ROCE | 40.9% |
| P/E | 43.1x |
| PAT Margin | 13% |
| D/E | 0.12 |
Remarks: Financially sexy but valuation is at a premium.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 4,872 | 5,842 | 6,016 |
| EBITDA | 991 | 1,230 | 1,221 |
| PAT | 599 | 840 | 807 |
Remarks: Growth is steady but FY25 shows margin saturation.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| TCS | 2,56,148 | 49,273 | 22.4 |
| Infosys | 1,65,954 | 27,266 | 23.1 |
| Persistent Sys | 12,535 | 1,519 | 53.2 |
| KPIT Tech | 6,016 | 807 | 43.1 |
Remarks: Trades at a higher P/E than IT giants, justified only by niche auto software positioning.
Miscellaneous – Shareholding, Promoters
- Promoters: 39.45% (stable)
- FIIs: 15.5% (declining)
- DIIs: 22.4% (increasing)
- Public: 21.9%
Sarcastic Take: FIIs are pulling out while DIIs are loading up – either they’re patriotic or they love EVs more than profits.
EduInvesting Verdict™
KPIT Technologies is not just coding cars; it’s coding the future of mobility. High ROE, strong growth, and strategic partnerships make it an exciting play. However, at P/E 43, the stock is priced like it’s already in pole position. Any slowdown in the EV wave or project delays could slam the brakes.
SWOT Quickie:
- Strengths: Niche positioning, high ROCE, strong client relationships.
- Weaknesses: Margin pressure, high valuation.
- Opportunities: EV boom, software-defined vehicle revolution.
- Threats: OEM dependency, competitive pricing, tech disruptions.
Final Word: KPIT is a premium ride in the mobility tech world. Great business, but investors need seatbelts – volatility ahead.
Written by EduInvesting Team | 30 July 2025
SEO Tags: KPIT Technologies, EV Software Stocks, Q1 FY26 Results, Automotive Tech
