Synopsis
KPIT Technologies reported a 33.4% year-on-year drop in Q4 FY26 net profit to Rs. 162.9 crore, impacted by geopolitical uncertainties, despite an 11.9% revenue increase. The company also announced a strategic acquisition of Israel-based automotive cybersecurity firm Cymotive Technologies for up to $120 million.The Pune-headquartered company also announced the acquisition of a strategic stake across multiple tranches in Israel-based Cymotive Technologies Ltd, an automotive cybersecurity company, for a total consideration of up to $120 million.
Revenue for the January-March period stood at Rs. 1,711 crore, gaining 11.9% on-year basis, while sequentially it rose 5.8%. In constant currency terms, revenue grew 1.8% quarter-on-quarter, narrowly beating street estimates.
Brokerages, on average, expected the company to post sequential revenue growth between 1% and 1.7% in constant currency terms. In dollar terms, revenue for the quarter came in at $185 million.
“There are many trade and geopolitical uncertainties….challenges with vehicle cells (for EVs), the supply chain disruptions due to the Midwest crisis, some policy changes regarding Chinese OEMs…these have really impacted the industry,” said Kishor Patil, chief executive officer of KPIT, in the post-earnings press conference.
“While the (West Asia) war has minimal direct impact, it did impact manufacturers in terms of supply chains and cost of raw materials,” Patil added, highlighting that this hindered investment in new platforms.
While the company did not issue revenue guidance for FY27, it expects to do better than FY26 on the back of additional market opportunities and revenue visibility. However, the company mentioned ramping down of two clients for software-defined vehicles, namely Honda and Renault, in the first half of FY27, which could have otherwise added 4%-5% sequential growth.
Honda’s ramp down came after the company announced it was discontinuing its electric vehicle plans in March 2026 in order to focus on its conventional and hybrid models.
KPIT expects growth from commercial (on and off-highway) vertical, along with geographies like the USA, India and China to offset the loss in revenue. KPIT's shares fell as much as 6% on the National Stock Exchange post the results, closing down 3% at Rs. 748.6.
For the full year of 2026, KPIT posted a revenue of Rs. 6454.9 crore, up 10.9% compared with the Rs. 5842.3 crore posted in FY25.
The company also deployed its mobility intelligence platform named 'Beacon' across multiple OEMs to enable faster software deployments and reduce vehicle software costs.
In part of pursuing the additional scope of work, the company is investing $10 million upfront in preferential capital in Cymotive, expected to close by mid-June 2026.
This investment will be converted to a 26% equity stake in the company within eight quarters of the initial investment, based on the achievement of certain performance milestones by Cymotive.
Post the conversion, KPIT will acquire the remaining stake in the company across two tranches; once to own 65% stake in the company and the other to own the complete 100% stake. The total consideration of the acquisition is expected to be between $60 million and $120 million, subject to the actual revenue and EBIT numbers achieved by the Tel Aviv-based company.
The complete acquisition is expected to close by mid-2029.
Cymotive has two partners, Patil highlighted, Cariad- the software arm of automotive company Volkswagen and cybersecurity experts in Israel. “With large parts of the revenue coming from Cariad, they want more work around to be done out of India’s base, along with Cymotive’s experts,” he said, making it cost-competitive.
For the quarter, revenue growth was led by the commercial vehicles vertical, up 43% on-year, while passenger cars clocked a modest 0.5% gain. Among geographies, Europe led YoY growth, gaining 12.7%, although sequentially it declined 7.1%. The United States and Asia declined 0.6% and 3.8% YoY, respectively.
Aided by two large deals, new deal bookings came in at $349 million, compared with $202 million in the previous quarter.
Operating margins was 20.6% for the fourth quarter, contracting by 50 basis points compared with the same period a year ago. KPIT now expects margins to be between 20.5% to 21.2% for FY27, post increased investments in AI, products & solutions, competency development and new markets.
The company had a net reduction of 204 employees in the quarter, bringing its headcount down to 12,520.
KPIT Tech's board recommended a final dividend of Rs 5.25 per share, which is subject to approval by shareholders at the upcoming annual general meeting.
