JPMorgan lifts KPIT Technologies to Neutral on attractive valuation

what happened

JPMorgan upgraded KPIT Technologies Ltd. to Neutral from Underweight, citing relatively attractive valuation after the shares lagged the market. The bank set a price target of ₹520 per share. According to JPMorgan, the stock fell 21% over the past four months, while the Nifty IT index rose 22%. At about 16 times its two-year forward price-to-earnings multiple, the stock is among the cheaper names in the sector.

In the second quarter of FY27, revenue rose 0.5% quarter on quarter in constant currency, against expectations of flat growth, despite a roughly 13% year-on-year drop from its two largest clients. EBITDA margin reached 17.7%, up 60 basis points sequentially and above consensus. Management said the second half of FY27 should be better than the first, but gave no specific guidance for the fourth quarter. It expects revenue from its two largest accounts to keep falling, though the decline should bottom out.

Total contract value stood at $213 million in the September quarter, down about 17% from $257 million in the June quarter. The shares closed 3.87% higher at ₹552.50 on Wednesday, October 28, but remain down more than 52% so far in 2026.

why it matters

For investors, the signal centres on valuation and the outlook for automotive-focused IT services: Europe remains weak, while growth in the US, Asia and India supports revenue expectations. Wage decisions and contract value trends will be key to judging margin recovery.

market impact

KPIT Technologies shares: the upgrade and expected growth recovery support interest in the stock

• ▲KPIT Technologies pressure up — JPMorgan's upgrade to Neutral and a valuation seen as attractive

tags

instruments