KPIT, the Pune-based engineering services company, has reported a revenue of INR 744.83 crore a 27% growth over INR 590.87 crore in the same quarter last fiscal.
Kishor Patil, Co-founder, CEO and MD, KPIT, said at a press meeting that performance had exceeded expectations. “We have a healthy pipeline with a couple of mega engagements expected to get closed in the coming 3-4 months.”
Sachin Tikekar, President and Joint MD, KPIT, added that vehicle makers were investing heavily to develop software-defined vehicles (SDVs). “This calls for deep domain expertise and software competence, which KPIT brings to the table. We are seeing the result of this and thus witnessing increased traction with our strategic clients,” he said.
According to Tikekar, supply side constraints were gradually moving in the right direction. The company has projected 31-32% growth for this fiscal along with an EBITDA margin of 18.5-19%. This is on the back of an all-time high revenue pipeline with orders worth $142 million won during the quarter.
Patil said most of the revenues come from the top 25 clients and to achieve the projected growth, “we don’t need to acquire a client” since some of the business in the pipeline will give good traction.
“The focus has to be on execution and fulfilment. We also feel good about the market easing on the people's front,” he added. The company has increased its headcount by 11% in Q1 and 8% in Q2 with hiring of freshers in progress. “We have increased our capacity substantially to hire (more people); the best we have done is to add about 1,000 people per quarter,” said Patil.
KPIT is also strengthening its recently opened centres in India (Kochi) and Egypt which allow it access to diverse talent. In addition, acquiring Technica has given access to two development centres in Spain which will also support growth.
Tikekar said there was now an enhanced perception about KPIT in the eyes of OEMs with competence, scale and internal processes/systems supporting growth. KPIT is working to realise the potential, he added. The key programme, according to him, was SDVs and “we are bullish on this; it will be a major area for our growth”.
The commercial vehicle segment could also become part of this fold. “We see leading carmakers jumping onto SDV and are engaging with at least seven of the 10 which are serious. In the case of CVs, the business case is different and we are conducting workshops to explain the potential of SDV for CVs,” elaborated Tikekar.
Most of them are now evaluating this option and there is a “solid business case” to get to autonomous level-3 and level-4 in CVs. “That part of CVs is getting accelerated,” he added.
According to Tikekar, the company’s major clients are spread across Asia, Europe and North America with new ones emerging in these regions. The focus will be on passenger/commercial vehicles. At present, Asia accounts for 20% of total revenue with Europe and North America accounting for the balance.
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