Latest news with #KPIT
Time of India
14-07-2025
- Business
- Time of India
Negatives mostly priced in for tier 1 IT companies; correction likely in midcaps: Sunny Agrawal
Sunny Agrawal , Head of Fundamental Equity Research, SBI Cap Securities , says The IT sector faces a weak demand environment as clients seek productivity gains through Gen-AI while expecting cost benefits. While tier I IT company negatives are priced in, midcap IT firms face potential correction due to expensive valuations. KPIT Tech is expected to deliver muted growth commentary for FY26 amid global automobile industry uncertainties. What is your take on the IT pack? The market has digested TCS earnings and given that the company is not that bullish on the growth outlook and are anticipating some pressure on discretionary spending, we have already seen very tepid moves coming in the other IT majors as well. But within the lot, KPIT Tech is holding on to the gains of 2% right now. How do you analyse the overall IT space and any stock that you would like to bet on in this correction? Sunny Agrawal: The way the commentary of TCS and Tata Elxsi has played out, it clearly seems there is a lot of uncertainty in terms of demand environment and at the same time, clients want to increase productivity using various Gen-AI tools and at the same time they want the benefit to be passed on to him or her. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo So, overall, a pretty weak demand environment as far as the IT sector is concerned. Coming to a stock specific action or price action, most of the negatives are already in the price at least for tier I IT companies – be it TCS, Infosys or HCL Tech . The issue is with the midcap IT companies. The valuations are very expensive there compared to their largecap peers. In case the demand environment or the commentary is on weaker front from midcap companies, we see a sharp correction in the midcap IT pack. Moving on to the KPIT, the company during the mid-quarter update has already alerted the street that the deal execution is not playing out as per expectation and the deal wins are likely to slow down. Thus the negative news is already priced in for KPIT Tech and any positive development on the automobile side can act as a positive. Live Events You Might Also Like: Where to park money and where to create wealth now? Jyotivardhan Jaipuria answers But given the trade uncertainty going on in the global automobile industry, the transition from ICE engine to electric or for that matter hybrid, the dynamics of the industry are changing very rapidly. We expect KPIT to deliver a very muted set of commentary as far as growth for FY26 is concerned. So, let us wait and see what is the commentary of management on KPIT. You Might Also Like: Market very delicately poised; any bad news and we run the risk of downside: Aashish Somaiyaa TCS management on use-case based approach to AI; identifies 4 areas of focus
Economic Times
14-07-2025
- Business
- Economic Times
Negatives mostly priced in for tier 1 IT companies; correction likely in midcaps: Sunny Agrawal
Live Events You Might Also Like: Where to park money and where to create wealth now? Jyotivardhan Jaipuria answers (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Head of Fundamental Equity Research,, says The IT sector faces a weak demand environment as clients seek productivity gains through Gen-AI while expecting cost benefits. While tier I IT company negatives are priced in, midcap IT firms face potential correction due to expensive valuations. KPIT Tech is expected to deliver muted growth commentary for FY26 amid global automobile industry way the commentary of TCS and Tata Elxsi has played out, it clearly seems there is a lot of uncertainty in terms of demand environment and at the same time, clients want to increase productivity using various Gen-AI tools and at the same time they want the benefit to be passed on to him or overall, a pretty weak demand environment as far as the IT sector is concerned. Coming to a stock specific action or price action, most of the negatives are already in the price at least for tier I IT companies – be it TCS, Infosys or HCL Tech The issue is with the midcap IT companies. The valuations are very expensive there compared to their largecap peers. In case the demand environment or the commentary is on weaker front from midcap companies, we see a sharp correction in the midcap IT on to the KPIT, the company during the mid-quarter update has already alerted the street that the deal execution is not playing out as per expectation and the deal wins are likely to slow down. Thus the negative news is already priced in for KPIT Tech and any positive development on the automobile side can act as a given the trade uncertainty going on in the global automobile industry, the transition from ICE engine to electric or for that matter hybrid, the dynamics of the industry are changing very rapidly. We expect KPIT to deliver a very muted set of commentary as far as growth for FY26 is concerned. So, let us wait and see what is the commentary of management on KPIT.
Economic Times
10-07-2025
- Business
- Economic Times
Dollar's slide may help IT add 70–300 basis points to Q1 revenues
ETtech Currency is set to overshadow volumes as growth drivers in the June-quarter toplines at Indian tech powerhouses, with a falling dollar giving the anticipated tepid sales some much-needed ballast amid an evident revenue slack in the industry's traditional money spinners either side of the Atlantic.A retreat for the dollar, which gives the rupee a tailwind, should boost Indian tech revenues by 70-300 basis points in the June quarter, analysts said. One basis point is a hundredth of a percentage point. The currency impact cited above, therefore, should expand revenues by 0.7 to 3 percentage the April-June quarter, most major currencies have appreciated on average versus the US Dollar (USD). For instance, the Indian Rupee (INR) appreciated 1%, the Pound Sterling (GBP) 6.2%, the Euro (EUR) 8%, the Australian Dollar (AUD) 2.6% and the Japanese Yen (JPY) grew 5.5%. A weak dollar against a basket of currencies will lead to 100-200 bps of on-quarter cross-currency tailwinds, Motilal Oswal said in a report. HSBC Global Research estimates the impact to range between 80-450 basis points. These movements are higher for companies with greater exposure to EUR, GBP and JPY such as Tata Consultancy Services (TCS), HCL Technologies, Coforge, KPIT, data from Kotak Institutional Equities showed. Currency movements are crucial because Indian IT firms earn a large share of their revenues in foreign currencies but spend in INR -- most of it on employee wages in India. Typically, a stronger dollar helps gain more revenues as most IT majors' over 40-50% revenue comes from the US. However, when the dollar weakens against other currencies such as GBP, EUR, or JPY, revenues earned in those regions helps boost the reported toplines in instance, India's largest software service provider, TCS, has the least dollar dependency among tier-1 companies and derives 50% of its revenues from non-USD currencies. It is expected to net a 211 basis points revenue upside in the second quarter of the ongoing fiscal. The maximum positive impact could be recorded by mid-sized firm KPIT at 299 basis points because it derives a substantial 72% of its revenues from non-USD markets, data by Kotak Institutional Equities showed."During the quarter, the Indian rupee has appreciated around 1% against the dollar which typically is not beneficial for exporters,' said Sumit Pokharna, IT analyst with Kotak Securities. 'However, the rupee has depreciated against other currencies in the 2.5-8% range. This is providing tailwinds for software services exporters on the US$ revenue growth from the previous quarter.'He added that tighter controls by companies on travel costs and hikes and some pulling back on compensation, will aid margins stability for large IT companies while expansion for select mid IT at a time when discretionary spending remains muted, and deal closure timelines are elongated, the exposure to other currencies is helping IT firms, Pokharna the flip side, companies like Persistent Systems and Mphasis, which have among the highest exposure to the US at 85% and 82%, respectively, the sequential benefit of the currency movement will be contained at 69 basis points and 75 basis points, respectively. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Markets need to see more than profits from Oyo Can Grasim's anti-competition charge against Asian Paints stand amid intense war Engine fuel switches or something else? One month on, still no word on what crashed AI 171 Delhivery survived the Meesho curveball. Can it keep on delivering profits? Stock Radar: Page Industries breaks out from Cup & Handle formation; stock hits fresh 52-week high For risk-takers with ability to stay invested for the long term: 5 small-caps from different sectors with upside potential of 5 to 32% Multibagger or IBC - Part 14: This auto ancillary with double-digit net margins is now getting EV-focused These mid-cap stocks with 'Strong Buy' & 'Buy' recos can rally over 25%, according to analysts
Time of India
10-07-2025
- Business
- Time of India
Dollar's slide may help IT add 70–300 basis points to Q1 revenues
Academy Empower your mind, elevate your skills ETtech Currency is set to overshadow volumes as growth drivers in the June-quarter toplines at Indian tech powerhouses, with a falling dollar giving the anticipated tepid sales some much-needed ballast amid an evident revenue slack in the industry's traditional money spinners either side of the Atlantic.A retreat for the dollar, which gives the rupee a tailwind, should boost Indian tech revenues by 70-300 basis points in the June quarter, analysts basis point is a hundredth of a percentage currency impact cited above, therefore, should expand revenues by 0.7 to 3 percentage the April-June quarter, most major currencies have appreciated on average versus the US Dollar (USD). For instance, the Indian Rupee (INR) appreciated 1%, the Pound Sterling (GBP) 6.2%, the Euro (EUR) 8%, the Australian Dollar (AUD) 2.6% and the Japanese Yen (JPY) grew 5.5%.A weak dollar against a basket of currencies will lead to 100-200 bps of on-quarter cross-currency tailwinds, Motilal Oswal said in a report. HSBC Global Research estimates the impact to range between 80-450 basis points. These movements are higher for companies with greater exposure to EUR, GBP and JPY such as Tata Consultancy Services (TCS), HCL Technologies Coforge , KPIT, data from Kotak Institutional Equities movements are crucial because Indian IT firms earn a large share of their revenues in foreign currencies but spend in INR -- most of it on employee wages in India. Typically, a stronger dollar helps gain more revenues as most IT majors' over 40-50% revenue comes from the US. However, when the dollar weakens against other currencies such as GBP, EUR, or JPY, revenues earned in those regions helps boost the reported toplines in instance, India's largest software service provider, TCS, has the least dollar dependency among tier-1 companies and derives 50% of its revenues from non-USD currencies. It is expected to net a 211 basis points revenue upside in the second quarter of the ongoing fiscal. The maximum positive impact could be recorded by mid-sized firm KPIT at 299 basis points because it derives a substantial 72% of its revenues from non-USD markets, data by Kotak Institutional Equities showed."During the quarter, the Indian rupee has appreciated around 1% against the dollar which typically is not beneficial for exporters,' said Sumit Pokharna, IT analyst with Kotak Securities. 'However, the rupee has depreciated against other currencies in the 2.5-8% range. This is providing tailwinds for software services exporters on the US$ revenue growth from the previous quarter.'He added that tighter controls by companies on travel costs and hikes and some pulling back on compensation, will aid margins stability for large IT companies while expansion for select mid IT at a time when discretionary spending remains muted, and deal closure timelines are elongated, the exposure to other currencies is helping IT firms, Pokharna the flip side, companies like Persistent Systems and Mphasis, which have among the highest exposure to the US at 85% and 82%, respectively, the sequential benefit of the currency movement will be contained at 69 basis points and 75 basis points, respectively.
Economic Times
28-06-2025
- Automotive
- Economic Times
KPIT CEO calls for increased R&D, deeptech investments
ETtech Kishor Patil, cofounder and CEO, KPIT Technologies India needs to push investments into research and development in technology and deeptech, and boost quality exports to compete in the automotive sector, said Kishor Patil, cofounder and chief executive of mid-tier engineering and technology services firm KPIT Technologies.'If you look right now, the innovation index of India is still very extremely low; Rundefined educational reforms which are happening should help over time. And we have to build our exports…there quality will be key. It is headed in that direction but not what we need.' India's R&D expenditure as a percentage of GDP was around 0.7% in 2024, compared with 2.68% in China, as per a discussion paper by government think tank NITI Aayog. According to Patil, with the ongoing geopolitical conflicts, supply chain issues hurting China, and Europe and the US being slow markets due to tariffs and other macro factors, 'India is the only market which is growing and open. So, my view is, this is the time we have to really build a very strong ecosystem.'One of the strengths of China has been the ecosystem built with support from its government, he said, adding that in India, the government needs to push infrastructure and automotive-focused software services provider, KPIT has increased its own R&D investments to around 6-7% of revenue from 2-3% about five years ago, he the financial year ended March 2024, KPIT spent $13.53 million on R&D as compared to $9.6 million in the previous year, as per its annual report. The FY24 spending was around 2.3% of the revenue.'For KPIT, we have a 6-7% investment into R&D, typically around 2-4% is organic and inorganically it is 2-3%,' Patil said. The Pune-headquartered company made three investments in 2023-24, worth over Rs 400 crore (around $47 million). In May this year, KPIT said it acquired US-based Caresoft Global Technologies' Engineering solutions for up to $191 million to expand its business in the off-highway commercial vehicle segment. The company will increase investment in the off-highway commercial vehicle segment, he said. The Caresoft acquisition is for that, he said, adding that it will also open the China market for KPIT along with cost reduction to compete with China's automotive FY25, KPIT's revenue grew 18% to $691 is the company's fastest growing market is Asia, with an around 20% market share, he said. 'Europe and the US are similar over 30% each. But India, Japan and, this year, Europe look better for us.'Patil expects the three regions to be key growth areas for the company with technologies like cybersecurity, autonomous vehicles and artificial intelligence being integral to the deal pipeline worth $280 million that the company indicated during its FY25 results announcement. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. The bike taxi dreams of Rapido, Uber, and Ola just got a jolt. But they're winning public favour Second only to L&T, but controversies may weaken this infra powerhouse's growth story Punit Goenka reloads Zee with Bullet and OTT focus. Can he beat mighty rivals? 3 critical hurdles in India's quest for rare earth independence HDB Financial may be cheaper than Bajaj Fin, but what about returns? Why Sebi must give up veto power over market infra institutions These large- and mid-cap stocks can give more than 23% return in 1 year, according to analysts Are short-term headwinds from China an opportunity? 8 auto stocks: Time to be contrarian? Buy, Sell or Hold: Motilal Oswal initiates coverage on Supreme Industries; UBS initiates coverage on PNB Housing
