KPIT Technologies shares closed at ₹552.50 on Wednesday, a 3.87% gain that signaled a potential shift in sentiment. And it wasn't just noise. JPMorgan flipped its stance to 'Neutral' from 'Underweight,' pegging a target of ₹520. The rationale? Valuation. At roughly 16 times two-year forward earnings, the stock looks cheap compared to peers who have rallied while KPIT bled value.
The numbers back up the brokerage's optimism. Q2 FY27 revenue grew 0.5% quarter-on-quarter in constant currency, beating the consensus of flat growth. EBITDA margins expanded to 17.7%, up 60 basis points sequentially. This margin lift came despite a 13% year-on-year decline in revenue from the company's two largest clients. The implication is clear: the rest of the business is pulling its weight, masking the drag from those top accounts.
But let's not get ahead of ourselves. The stock is still down more than 52% in 2026. Management admitted on the earnings call that the two largest accounts will see further revenue declines over the next couple of quarters. Total contract value also slipped to $213 million in the September quarter, down from $257 million in June. Yet, management pointed to "healthy growth" in the Products and Solutions segment and a "decent improvement" in the pipeline as offsetting factors.
Looking ahead, the path to 20-21% margins likely stretches into early next year. Management expects gradual margin improvement driven by operating leverage and AI-led productivity gains. Europe remains the weak link, with a "prolonged" recovery expected among OEMs. India, however, is emerging as a critical growth engine. For traders, the upgrade offers a floor, but the real test is whether the bottoming out of top-client revenue materializes as promised.