Shares of KPIT Technologies Ltd witnessed a sharp sell-off on Wednesday, hitting consecutive lower circuits and falling more than 15% after the company issued a profit warning for the April–June quarter.
The automotive software firm also indicated that weak business conditions are likely to persist into the September quarter, triggering heavy investor concern.
At around 12 pm, KPIT Technologies was trading at around ₹563, down 16%, making it the worst-performing stock on the BSE Midcap index.
The stock has now declined over 54% in the past one year, significantly underperforming the Nifty 50, which fell about 6.4% in the same period.
The company guided that its revenue for the second quarter of FY27 is expected to remain broadly in line with the first quarter, suggesting continued near-term weakness in demand and limited recovery visibility.
In a parallel development, around 62.61 lakh shares, representing 2.24% of the company’s equity, changed hands in block deals at an average price of ₹375 per share.
The total transaction value stood at approximately ₹362.4 crore, adding to market volatility.
Following the update, global brokerage JPMorgan downgraded KPIT Technologies to “Underweight” from “Neutral” and reduced its target price to ₹550 from ₹700. The brokerage stated that it now expects the company’s Q1 results to fall short of earlier expectations, with revenue and margins likely to disappoint.
According to a report by Moneycontrol, JPMorgan projected a 1% year-on-year and 4% quarter-on-quarter decline in dollar revenue on a constant currency basis.
The brokerage attributed the weakness to reduced spending by European automobile OEMs, particularly BMW and Volkswagen, which together account for a significant portion of KPIT’s business.
BMW alone contributes around 12% of KPIT’s revenue, making it a key client impacting performance.
JPMorgan also expects sharp pressure on EBITDA and net profit margins, noting that cost optimization measures may not be sufficient in the short term.
The brokerage further warned that the first half of FY27 could remain weak, with any meaningful recovery likely only in the fourth quarter. It also raised concerns that FY27 may mark a second consecutive year of organic revenue decline.
As a result, JPMorgan cut its revenue, margin, and earnings estimates for FY27–FY29 and reduced its valuation multiple, reflecting a more cautious outlook for the stock.
