Shares of KPIT Technologies Ltd were little changed in early trade on Wednesday after Goldman Sachs maintained its ‘Neutral’ rating on the stock but cut its target price. The brokerage cited weaker client activity, a slower recovery in electric vehicle research and development (EV R&D) spending, and a muted growth outlook for FY27.
Goldman Sachs cut its target price on KPIT Technologies stock to Rs 637 from Rs 740 and now expects the company to report a 5.2 percent sequential decline in revenue for the June quarter. It also sees FY27 revenue growth remaining flat as headwinds in the first half of the financial year weigh on performance.
KPIT Tech shares were trading at Rs 558.85 in morning trade, down 0.63 percent. The stock has largely stabilised after plunging about 17 percent on July 1 following the company’s profit warning and weaker-than-expected business outlook. Shares are down 51.5 percent year-to-date, compared with a 6.7 percent decline in the Nifty 50.
Goldman Sachs also cut its FY26-FY28 earnings per share estimates by up to 15 percent, reflecting expectations of a slower recovery in spending on electric vehicle software and engineering programmes.
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While remaining cautious on the near-term outlook, the brokerage said investor focus is likely to shift to the second half of FY27, when demand conditions could improve. It identified two key monitorables: the pace of research and development spending by global automotive original equipment manufacturers (OEMs) and progress on the integration of Cymotive, the automotive cybersecurity company acquired by KPIT.
KPIT Tech came under intense selling pressure last week after the company warned that its June-quarter performance would fall short of expectations, and also said September-quarter revenue is expected to remain broadly in line with the June quarter.
The update prompted several brokerages to cut estimates amid concerns over weaker spending by European automotive customers. Analysts broadly expect the first half of FY27 to remain challenging, with any meaningful recovery dependent on a pickup in automotive R&D spending during the second half of the year.
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