KPIT Technologies (KPITTECH) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 revenue grew 9.4% year-on-year to ₹16,175 million, with constant currency growth at 1.5% and strong contributions from Off-Highway, Powertrain, and Diagnostics segments.

• EBITDA increased 6.8% year-on-year, remaining flat sequentially, while net profit (excluding one-time Labor Code impact) was ₹1,530 million, but reported net profit was ₹1,334 million due to a one-time statutory wage code expense.

• Organic growth was slightly negative for the quarter, with Europe and off-highway commercial segments driving growth, while Asia saw declines due to large program completions and market challenges in Japan.

• The business is transitioning from services to solutions, focusing on AI, fixed-price contracts (now 66% of revenue), and strategic partnerships, including with Microsoft and Hero Group.

• Significant investments in AI, acquisitions, and leadership appointments support the transformation and expansion into new geographies and mobility adjacencies.

Financial highlights

• Revenue from operations reached ₹16,175 million, up from ₹14,780 million in Q3 FY25, with EBITDA margin at 20.6% and EBIT margin at 15.6%.

• Net profit for Q3 FY26 was ₹1,334 million, down 28.8% YoY, impacted by a one-time statutory wage code expense of ₹597 million.

• Interim dividend of ₹2.25 per share declared, with cash balance at ₹9 billion after payouts for Caresoft and N-Dream acquisitions.

• TCV for the quarter at $202 million, with Europe leading, followed by the USA and China.

• EPS (diluted) was 4.87, or 6.59 excluding the wage code impact.

Outlook and guidance

• Q4 expected to deliver the highest growth and improved profitability for the year, with FY27 anticipated to see higher growth than FY26.

• Focus on AI-native client solutions, talent upskilling, and expansion into new geographies and mobility adjacencies.

• Transition to solutions-led business expected to drive higher wallet share and margins in the mid-term, with management expecting stable near-term margins and improvement in the mid-term.