• Client headwinds: Near-term performance was impacted by sudden spending cutbacks at KPIT’s top two clients in Europe and Japan, triggered by component cost inflation, Middle East war disruptions, US tariffs, and intense Chinese competition.
• Growth recovery: While the company expects subdued growth during the current consolidation year, it anticipates an H2 recovery driven by Q4 as seven to eight new accounts scale, targeting double-digit growth next year.
• Fixed-price transition: Fixed-price contracts currently represent 67% of revenues, with an ongoing transition toward AI-led productivity, proprietary products, and outcome-based platforms expected to take about six months.
• Margin expansion: EBITDA margins stand at 17.2% and are projected to rise past 20% to 20.5% around Q4 or Q1, with an aspirational target of 23% to 24% over the next two to three years.