Prabhudas Lilladher keeps Reduce on KPIT Technologies, raises target to Rs 520

what happened

Analysts at Prabhudas Lilladher, whose research report was published by TradingView, said KPIT Technologies' Q2FY27 results came in ahead of their estimates. Revenue in constant currency rose 0.5% quarter on quarter, against their forecast of a 0.9% decline, and EBIT margin reached 12.7% versus their projected 11.7%. Trucks and off-highway vehicles, which grew 17.6% sequentially and 27% year on year, and the product business supported the numbers, while passenger vehicles stayed weak.

However, the US$213 million in deal wins was viewed as relatively soft, and conversion into revenue is slow as customers take longer to decide. Qorix losses widened to INR 156 million from INR 140 million in Q1, because OEMs pushed next-generation programmes from 2028 to 2029–30. Management expects margins to improve and EBITDA to return to the 20–21% range by FY28E.

The analysts raised their EBIT margin estimates and their target price to Rs 520 from Rs 470, while keeping a Reduce rating.

why it matters

For the broader market this is a single-company update: a broker's rating and estimate revisions do not change the sector picture. The valuation rests on an 18x P/E applied to forecast EPS. The key question for investors is when revenue from large European customers stabilises and new business areas gain traction.

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