KPIT Technologies Shares Crash 16% After Q1 Warn

Shares of KPIT Technologies fell sharply on Wednesday, hitting a fresh 52-week low of Rs 559.20 on the NSE after a weak Q1 earnings warning.

The stock had already hit its lower circuit limit earlier in the session at Rs 604.40, before falling even further once trading resumed.

KPIT said sudden spending cuts by some European carmakers hit its business harder and faster than expected.

The company did not see this coming until the last few weeks. Reports suggest the pressure is largely coming from BMW and Volkswagen, two of its bigger clients in Europe.

Because of this, KPIT now expects its US dollar revenue for the June quarter to fall around 1% compared to the same period last year.

Profit margins are set to take a bigger hit than revenue, since there was no real window to cut costs on such short notice.

Adding to the pressure, a block deal saw around 62.6 lakh shares, or 2.24% of the company, change hands at an average price of Rs 375. That trade alone was worth close to Rs 362 crore.

KPIT has tried to reassure investors, saying its order book remains strong and that markets like the US, Korea and India are still showing good traction.

The company expects things to stabilise gradually, with a stronger second half of the financial year.

At 11:43 am on Wednesday, the stock was trading at Rs 563.00 on the NSE, down 16.16% for the day. It has now fallen close to 55% over the past year.

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