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Tata Elxsi tumbles as KPIT Technologies' weak outlook weighs on auto engineering peers
01-Jul-26 14:51Hrs IST

The selling came after KPIT Technologies shares slumped about 17% after the company said it expects Q2 FY27 revenue to remain broadly in line with Q1 FY27, signalling that the demand slowdown could persist in the near term.

KPIT had earlier warned that its Q1 FY27 USD reported revenue is likely to decline about 1% year-on-year, primarily due to sudden actions by several European original equipment manufacturers (OEMs) following recent profit warnings and a weaker business outlook. The company also said its EBITDA and net profit margins would decline sequentially.

The cautious commentary raised concerns over spending by global automotive clients, prompting investors to pare exposure to peers such as Tata Elxsi, which also derives a significant share of its revenue from automotive engineering and software services.

While KPIT expects the near-term weakness to be temporary and has reiterated confidence in a recovery during the second half of FY27, investors remained cautious about the outlook for the automotive technology sector.

Tata Elxsi is a global provider of design and technology services, with a strong presence in the automotive, broadcast, communications, healthcare and transportation sectors.

The company reported a 27.8% year-on-year increase in net profit to Rs 220.35 crore in Q4 FY26 from Rs 172.42 crore in Q4 FY25. Revenue from operations rose 9.4% to Rs 993.75 crore during the quarter ended 31 March 2026, compared with Rs 908.34 crore in the year-ago period.

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