KPIT Technologies reported a subdued performance for the first quarter of FY27 as cost-cutting measures by global automotive manufacturers impacted its engineering services business. The automotive software and engineering company posted a 32% year-on-year decline in net profit to ₹117 crore for the quarter ended June 30, while profit fell 28% sequentially.
Revenue from operations increased 8.9% YoY to ₹1,675 crore, although it declined 2.2% quarter-on-quarter. EBITDA margin stood at 16.2%, while EBIT margin came in at 12.3%. The company maintained a healthy net cash position of ₹900 crore.
Global OEM Spending Cuts Weigh on Performance
KPIT attributed the weak quarterly performance to reduced engineering spending by two of its largest automotive customers—one in Germany and another in Japan. The slowdown reflects broader challenges facing global automakers, particularly in Europe and Japan, where weak vehicle demand, intense competition from Chinese manufacturers, supply chain disruptions and tariff-related uncertainties have prompted companies to reduce costs and delay development programmes.
Speaking during the post-results virtual press conference, Kishor Patil, Chief Executive Officer and Managing Director, KPIT Technologies, said most European OEMs have announced restructuring measures, profit warnings and tighter cost controls, directly impacting the company’s business.
Despite the temporary slowdown, KPIT emphasized that customer projects have been paused rather than cancelled and expects these accounts to stabilize over the next two quarters, with growth likely to return in the fourth quarter of FY27.
Deal Wins Remain Strong
During the quarter, KPIT secured total contract wins worth $257 million across multiple geographies, demonstrating continued customer confidence despite market uncertainties.
Among the notable achievements was AirConsole’s first passenger vehicle programme in India, which will power the in-car gaming platform in Tata Motors’ Sierra EV. AirConsole is KPIT’s Switzerland-based gaming platform company.
Broadening Customer Base and Mobility Portfolio
The current market environment has reinforced KPIT’s strategy of diversifying its customer portfolio and expanding into emerging mobility segments.
According to Sachin Tikekar, Joint Managing Director, KPIT Technologies, the company added three new passenger vehicle OEMs during the past six months while strengthening its presence in commercial vehicles and off-highway equipment.
KPIT also secured six new customers in the off-highway segment across the United States, Europe, Southeast Asia, India, the Middle East and Africa.
The company believes software-defined machine architectures will become a major growth driver for off-highway applications, while the global truck segment is expected to recover from 2027 onwards.
AI Becomes a Strategic Growth Engine
KPIT is expanding its artificial intelligence capabilities through its proprietary Automotive Intelligence Platform, which is being offered both as a subscription-based solution and as an internal productivity platform for engineering programmes.
Although the company has not disclosed revenue generated from AI-led solutions, management indicated that customer interest and adoption have been encouraging.
The company expects AI, software-defined mobility and advanced engineering services to play an increasingly important role in its long-term growth strategy.
China and India Offer New Growth Opportunities
While Chinese automotive companies have intensified competition for Western OEMs, indirectly affecting KPIT’s business, the company sees China’s expanding global ambitions as a significant opportunity.
Patil said several Chinese automakers are increasingly looking beyond their domestic market and require global engineering partners to support international expansion. KPIT has already begun working with select Chinese OEMs and continues to invest in strengthening its presence in the country.
India is also becoming an increasingly important market for the company. Revenue from India now contributes an early double-digit percentage of KPIT’s overall business and has more than doubled over the past year.
The company currently works with India’s three leading automotive manufacturers while also partnering with global OEMs developing India-focused products and emerging mobility startups.
Patil noted that India’s strengths now extend beyond being a Global Capability Centre destination, citing the country’s engineering talent, AI expertise and rapidly growing automotive market as key competitive advantages.
Expanding Beyond Automotive
Beyond its core automotive engineering business, KPIT is evaluating adjacent technology opportunities to support future growth.
The company sees strong potential in micro-mobility, where Indian companies are increasingly investing in last-mile transportation solutions. KPIT also plans to leverage its expertise in embedded software across emerging sectors including artificial intelligence, robotics, cybersecurity and defence technologies.
Management said these initiatives are aimed at reducing dependence on a limited number of global automotive customers while positioning the company to benefit from the ongoing transformation of the global mobility ecosystem.
With continued investments in AI, software products, China, India, commercial vehicles and off-highway equipment, KPIT expects these emerging business segments to become important contributors to its long-term growth.
