Prabhudas Lilladher's Bold Call on KPIT Technologies: Target Price & What's Next for Investors!

Brokerage Reports

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Updated on 13 Nov 2025, 08:20 am

Prabhudas Lilladher's research report on KPIT Technologies reiterates a "BUY" recommendation and sets a Target Price (TP) of 1,380.

The company's operating performance showed a modest 0.3% Quarter-on-Quarter (QoQ) Constant Currency (CC) growth, largely in line with estimates, including 2.5% QoQ inorganic growth from the consolidation of Caresoft.

However, the report highlights an organic USD revenue de-growth of 2.3% QoQ. This is attributed to softness in the Passenger Vehicle (PV) segment, challenges in middleware services, and weakness in the United States and Japan regions. Factors include clients deprioritizing spending, discontinuing non-strategic programs, and cannibalization from the company's own AI-led products and solutions.

KPIT Technologies is actively exploring additional scope of offerings and adjacencies to compensate for the slowdown. A significant positive development is a large three-year strategic deal secured with a European automotive Original Equipment Manufacturer (OEM), expected to boost Q3 growth and reach full potential in Q4.

The Joint Venture (JV), Qorix, reported sporadic revenue and a one-time loss of INR 60 million in the second quarter.

Prabhudas Lilladher is adjusting revenue growth and margin forecasts for FY26E, FY27E, and FY28E due to the continued PV segment slowdown, particularly in the US, which indicates a staggered recovery. Earnings Per Share (EPS) adjustments stem from higher depreciation and a slower-than-anticipated JV turnaround.

The brokerage assigns a Price-to-Earnings (PE) multiple of 33 times to September 2027E earnings, translating to the Target Price (TP) of 1,380, maintaining the "BUY" recommendation.

Impact This report's insights are crucial for investors in KPIT Technologies, offering a view on near-term challenges and future growth drivers. The positive outlook from a reputable brokerage firm could influence investor sentiment and potentially the stock price. The mention of a large strategic deal and AI efforts signals focus on future growth areas within automotive IT. Impact Rating: 7/10

Difficult Terms Explained: * **QoQ**: Quarter-on-Quarter. Change compared to the previous quarter. * **CC**: Constant Currency. Financial reporting method excluding exchange rate fluctuations for clearer performance comparison. * **Inorganic Growth**: Growth from acquisitions or mergers, not internal expansion. * **Consolidation**: Combining financial results of an acquired company into the parent company's statements. * **Organic Revenue**: Revenue from core business operations, excluding acquisitions. * **PV Segment**: Passenger Vehicle Segment, related to cars and personal vehicles. * **Middleware Services**: Software bridging applications, enabling communication and data exchange. * **Cannibalized**: When a new product reduces sales of existing products from the same company. * **AI-led Products**: Products and solutions utilizing Artificial Intelligence. * **Adjacencies**: Related business areas or markets a company can expand into. * **OEM**: Original Equipment Manufacturer. A company manufacturing products based on others' designs (e.g., car manufacturers). * **JV**: Joint Venture. A business arrangement where two or more parties pool resources for a specific task. * **FY26E/FY27E/FY28E**: Fiscal Year 2026, 2027, 2028 Estimates. Projections for future financial years. * **EPS**: Earnings Per Share. Profit allocated to each outstanding share. * **Depreciation**: Accounting method for allocating the cost of an asset over its useful life. * **PE**: Price-to-Earnings ratio. Stock price relative to its Earnings Per Share. * **TP**: Target Price. Future price level predicted by an analyst/brokerage.