KPIT Technologies Ltd. is projecting a positive outlook for FY26 despite muted performance in Q2 of the current financial year. Speaking to NDTV Profit, the company's president and joint managing director, Sachin Tikekar, revealed that KPIT Technologies is in the process of finalising a few long-term deals.
KPIT Technologies' Q2 net profit remained nearly flat at Rs 203.7 crore versus Rs 204.2 crore in the preceding three months. Revenue rose 7.8% quarter-on-quarter for the three months ended September 2024 at Rs 1,471.4 crore from Rs 1,364.6 crore in Q1 of FY25.
The company, which provides engineering and R&D solutions to auto original equipment manufacturers (OEMs), is sitting on a solid order pipeline at the moment, its president said.
“From KPIT's perspective, I think we continue to see the closure of large engagements and meaningful conversations about some long-term engagements,” Tikekar told NDTV Profit.
“It's just that given their (OEMs') strategic priorities, some of these decisions are being pushed back a little bit. We thought that it's always prudent to let everybody know that this is the reality,” he added.
The top executive said that it was only a matter of time before things started to pick up for the company.
“Having said that, the conversations are good and the pipeline is great. To us, it's just a matter of time before things start to really pick up from KPIT perspective,” he said.
Tikekar explained that socio-political pressures, macroeconomic factors, and competition from Chinese OEMs had contributed to a slowdown in the industry this year.
“OEMs are trying to figure out what this change means to them, hence what kind of strategies they need to adopt in terms of consumer preferences, the markets that they want to target etc.,” he said.
The top executive noted that the current quarter is also going to be a mixed bag for OEMs.
“It may continue for another quarter or so till the time they can make the adjustments and make sure that they are all set from the mid to long-term perspective,” he said.
However, Tikekar said that things were looking “pretty solid” for the company.
“The pipeline is looking good, the conversations are really good, and we also believe that the OEMs have to make some of these important decisions. I think they are looking to consolidate things, and they are looking for a partner to take up larger chunks of business. We remain fairly optimistic about FY26,” he said.
Shares of KPIT Technologies Ltd. dipped nearly 15% to touch an intraday low of Rs 1,393.45 apiece on the NSE. The stock was trading 13% lower at Rs 1,422.25 per share at 12:45 pm, as compared to benchmark Nifty 50's 24,414.05, which was down by 0.09% at the same time.
Watch the full conversation here:
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