KPIT Technologies shares dropped over 5% on Tuesday after the company released a cautious mid-quarter update, highlighting persistent uncertainty in the business environment.
Shares of the Pune-based automotive IT firm declined as much as 5.11% on the BSE, hitting an intraday low of ₹1,319.70 despite an overall positive market trend. On the National Stock Exchange, the shares declined as much as 5.10%.
In its mid-quarter update for Q1 of the current financial year, KPIT Technologies cited ongoing geopolitical tensions and unclear tariff scenarios as reasons for the continued uncertainty in its business environment. The company also warned of a slowdown in deal conversions.
“While our deal pipeline remains strong, conversions are occurring at a slower-than-expected rate,” the company noted. “There is encouraging movement, particularly in Europe, but the outlook remains uncertain in the USA and Asia. Nonetheless, we’ve had early, albeit small, wins in the trucks and off-highway sectors.”
Additionally, KPIT reported that ramp-ups for newly secured projects are progressing more slowly than anticipated. Some of these wins have partially cannibalized existing revenues due to limited client budgets and prioritization of immediate needs.
The company also clarified that it does not expect any one-time gains in the first quarter of the current fiscal year.
Meanwhile, KPIT confirmed that the acquisition of Caresoft’s Global Engineering Solutions business, approved in May, is on track to be completed by the end of the quarter. Revenue from the acquired business will be consolidated from the second quarter.
The acquisition is expected to strengthen KPIT’s position in the trucks and off-highway segment, enhance its value proposition through full-vehicle cost reduction solutions, expand its manufacturing engineering portfolio, and support its entry into the China market.
As of 9:37 am, KPIT shares were trading 4.33% lower at ₹ 1,330, underperforming the Nifty Midcap 100 index, which was up 0.73%.
Disclaimer:
The information provided in this article is for informational purposes only and should not be considered as investment advice. Readers are advised to conduct their own research or consult a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses incurred based on the content of this article.
