Subject: KPIT Technologies Q3 FY26 Earnings Update – Performance Review & Stock Reaction

Executive Summary KPIT Technologies Limited has reported its financial results for the quarter ending December 2025 (Q3 FY26). Key Financial Highlights Revenue Growth: The company reported consolidated revenue of ₹1,617 crore, marking a sequential increase of 1.9%. In Constant Currency (CC) terms, growth stood at 1.5% QoQ, while USD revenue growth was nearly flat at 0.2%. Notably, organic growth for the quarter turned negative, signalling pressure on the core business momentum. Profitability & One-Time Impact: Net profit declined by 21% QoQ to ₹133 crore, down from ₹169 crore in the September quarter. However, this figure includes a significant exceptional item: a one-time charge of ₹59.7 crore attributed to the implementation of the new labour code. Management indicated that adjusted for this one-off impact, profitability would have shown sequential growth. Operational Metrics & Margins EBIT Performance: Earnings Before Interest and Tax (EBIT) fell 4.5% QoQ to ₹234 crore. Margin Contraction: Operating margins narrowed significantly. The EBIT margin contracted by 100 basis points (bps) to 14.5%, down from 15.5% in the previous quarter. Cost Drivers: Wage hikes were a primary driver of this contraction, contributing approximately 50 bps to the margin erosion. Management has flagged that the fourth quarter (Q4) will likely see continued margin pressure due to these ongoing wage adjustments. Management Outlook & Strategic Direction While KPIT did not provide specific numerical guidance for the upcoming quarters, the qualitative outlook remains cautiously optimistic for the medium term: FY27 vs. FY26: The company anticipates better growth momentum in FY27 compared to the current fiscal year, underpinned by steady deal wins. Deal Pipeline: The investor presentation highlighted that "transformative engagements" secured recently are expected to drive high-quality revenue growth in the medium term.