Rs 5.25 dividend announced by IT company with Q4 results; do you own the stock?

Rs 5.25 Dividend: Shares of KPIT Technologies fell more than 4 per cent on Wednesday, 6 May, after the company reported its March quarter (Q4FY26) results. The stock was trading at Rs 738.55, down 4.4 per cent after the announcement, and is already down about 37 per cent so far this year.

Margins decline on higher employee costs

KPIT reported steady sequential growth in profit and revenue. Net profit rose 22.6 per cent quarter-on-quarter to Rs 163 crore from Rs 133 crore, while revenue increased 5.8 per cent to Rs 1,711 crore from Rs 1,617 crore.

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However, margins came under pressure. EBITDA rose 2.6 per cent to Rs 322 crore from Rs 314 crore, but EBITDA margin narrowed by 60 basis points to 18.8 per cent from 19.4 per cent in the previous quarter.

As per the company’s exchange filing, the margin compression was largely due to an increase in employee benefit expenses, which rose to Rs 1,047 crore from Rs 996 crore in the December quarter.

Base effect aided profit growth

The company said in its exchange filing that the previous quarter’s profit was impacted by a one-time charge of Rs 59.7 crore due to the implementation of new labour codes. This base effect supported the sequential profit growth in Q4.

Final dividend announced

The board has recommended a final dividend of Rs 5.25 per equity share of face value Rs 10 each for FY26.

According to the exchange filing, the dividend translates to a 52.5 per cent payout and is subject to shareholder approval at the upcoming Annual General Meeting. The company added that the payout will be made within timelines prescribed under the Companies Act, 2013.

Acquisition to strengthen cybersecurity capabilities

KPIT also announced the acquisition of Cymotive Technologies, an Israel-based automotive cybersecurity firm.

According to the exchange filing, KPIT will invest $10 million at first, which is expected to close by mid-June 2026. This will give the company a 26 percent stake, which will grow to 65 percent and then 100 percent by mid-2029.

The total deal value is estimated between $60 million and $120 million, depending on performance milestones.

Strategic focus on software-defined vehicles

The company said in its filing that the acquisition will strengthen its capabilities in software-defined vehicles (SDVs), embedded systems, and automotive engineering.

Cymotive provides end-to-end vehicle lifecycle cybersecurity solutions, including cybersecurity management systems, intrusion detection, vulnerability management, and automated penetration testing.

KPIT added that the move is aimed at building product- and licensing-led revenue streams alongside its core engineering services business.