Why did KPIT Technologies share crash up to 29% in one...

Synopsis: KPIT Technologies Limited shares fell nearly 29% in a month amid European slowdown fears, Chinese competitive pressure, margin stress, weak earnings, and heavy technical selling, pushing the stock into deep oversold territory.

This Small-cap IT Stock, engaged in developing embedded software, AI solutions, and engineering R&D services for automotive and mobility sectors, focusing on SDVs, ADAS, electrification, and autonomous driving, slipped up to 8 percent in today’s intraday trade and crashed up to 28.69 percent over the past one month. In this article, we will explore the reasons for the stock’s fall.

Stock Price Movement

With a market capitalization of Rs. 24,574.25 crores, the share of KPIT Technologies Limited has reached an intraday low of Rs. 886.20 per equity share, rising nearly 7.63 percent from its previous day’s close price of Rs. 959.40. Since then, the stock has retreated and is currently trading at Rs. 888.70 per equity share.

KPIT Technologies Limited is currently trading at Rs. 886.20, down about 28.69 percent from its January 8, 2026 level of Rs. 1,242.70. The stock is also roughly 38.33 percent below its 52-week high of Rs. 1,436.95, reflecting a sharp correction from peak valuations in recent months.

Reason Behind the Fall

KPIT Technologies Limited shares fell 28.69 percent over the last one month, pressured by European demand slowdown, rising Chinese competition, margin stress, and weak earnings. The sharp correction was amplified by technical selling as the stock slipped into deep oversold territory. Here are the key reasons behind the decline.

European Slowdown Pressure

KPIT Technologies Limited is facing pressure as European automotive clients reduce discretionary technology spending, with OEMs delaying projects and prioritising cost control amid economic uncertainty and regulatory shifts in EV incentives and emissions. With over 50 percent of its revenue coming from Europe, the slowdown could weigh on near-term growth visibility.

Chinese Rival Threat

KPIT Technologies Limited faces growing pressure from Chinese competitors like Horizon Robotics, Black Sesame, BYD, and NIO, who offer low-cost SDV platforms, ADAS, and EV software. Leveraging subsidies and supply chains, they undercut pricing in Asia-Pacific and expanding European markets, risking KPIT’s margins and deals as OEMs favor cost-effective local solutions.

Modest Revenue Growth

KPIT Technologies Limited’s revenue increased 1.9 percent QoQ to Rs. 1,617 crore, showing steady but slow expansion from the September quarter, indicating stable demand despite cost pressures and a cautious global business environment.

Profit Impact From One-Time Charge

KPIT Tech’s EBIT declined 4.5 percent QoQ to Rs. 234 crore, while net profit fell 21 percent QoQ to Rs. 133 crore. Earnings were hit by a Rs. 59.7 crore one-time labour code impact, and profitability would have been stronger if adjusted for this exceptional item.

Margin Compression Continues

EBIT margin narrowed 100 bps to 14.5 percent from 15.5 percent. Wage hikes alone cut margins by 50 bps, and further pressure is expected next quarter, signalling rising cost stress despite revenue growth.

Technical Selling Pressure

KPIT Technologies Limited has entered extreme oversold territory with RSI near 17.6, far below the 30 mark, signalling intense selling pressure, bearish momentum, and fragile sentiment, with continued volatility risk in the near term.

KPIT Technologies Limited was established in 1990 and is engaged in providing cutting-edge embedded software, AI-driven digital solutions, and engineering R&D services exclusively for the global automotive and mobility sector from its Pune headquarters.

KPIT Technologies Limited specializes in developing software-defined vehicles (SDVs), autonomous driving systems, connected car technologies, electrification solutions, and ADAS (Advanced Driver Assistance Systems) for leading automakers worldwide. The company has development centers located in Europe, the USA, Japan, China, and India.

Recent Quarter Results

Coming into financial highlights, KPIT Technologies Limited’s revenue has increased from Rs. 1,478 crore in Q2 FY25 to Rs. 1,617 crore in Q2 FY26, which has grown by 9.40 percent. The net profit has decreased by 28.88 percent from Rs. 187 crore in Q2 FY25 to Rs. 133 crore in Q2 FY26. KPIT Technologies Limited’s revenue and net profit have grown at a CAGR of 22.06 percent and 41.52 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 40.0 percent and 32.5 percent, respectively. KPIT Technologies Limited has an earnings per share (EPS) of Rs. 26.2, and its debt-to-equity ratio is 0.16x.

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