loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Hidden Gem KPIT – A pure play auto ER&D bet on EV and autonomous vehicles (CMP 1,223 TP 1,475 21% Upside)

ICICIdirect Research 26 Dec 2025 DISCLAIMER

KPIT is a pure-play automotive ER&D services company, focused on helping global OEMs and Tier 1 suppliers accelerate their transition toward software defined vehicles (SDVs).
KPIT’s strategic decision to transition from services to an end-to-end solution led model and increased fixed-price contracts enhances delivery efficiency & profitability potential. Management remains confident of maintaining 21% EBITDA margins in the near-medium term despite wage increments spread across Q3 & Q4 and guides for a stronger pickup in Q4, which should set up a healthier growth trend for FY27. We expect a ~12% revenue growth CAGR over FY25-28E.
The recent Caresoft deal, its biggest acquisition in the last five years, adds depth in Commercial Vehicles and off-highway engineering, plus access to the China market. It has also invested in helm.ai, an autonomous driving software company and is entering newer areas like micromobility and industrial technology, which broadens its future growth prospects.
Client sentiment has also turned more positive, especially in areas like autonomous tech, cybersecurity, after-sales diagnostics, and commercial vehicle programs and demand is improving across Europe, India and China, which along with the current deal pipeline gives better visibility into FY27 growth momentum.
Notably, KPIT is experimenting with sodium-ion battery tech for e-Commercial Vehicles which could be an optional future growth lever if the technology scales well. Such geographic & portfolio diversification de-risks growth, lowers concentration, & strengthens resilience against Passenger Vehicle (~80% of revenue mix) downcycles.
We have a target price of ₹1,475 valuing it at 34x FY28E EPS (upside of 21%).

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere