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Informist, Monday, Apr. 28, 2025

By Arya S. Biju

MUMBAI – KPIT Technologies Ltd. reported a double-digit sequential rise in its bottom line for the March quarter, snapping two consecutive quarters of fall. Its top line saw a low single-digit sequential rise after a marginal rise in the previous quarter. Analysts had expected the company to see a modest rebound in the latest quarter, after reporting low earnings growth in the December quarter.  

The technology company, which provides engineering research and development services to automotive companies, reported a consolidated net profit of INR 2.45 billion, up nearly 31% on quarter, beating analysts' expectation of INR 1.94 billion. This also marked the highest sequential growth in the company's consolidated net profit in the last 17 quarters. 

The company's consolidated revenue for the March quarter rose over 3% sequentially to INR 15.28 billion, but was slightly below analysts' expectation of INR 15.32 billion. The latest quarter marked the 18th consecutive quarter of sequential revenue growth for the company. On a year-on-year basis, the company's consolidated net profit rose 49% and revenue was up 16%.

Shares of KPIT Tech, which traded lower before the announcement of the results, rose 0.7% after the announcement and were at INR 1,235 on the National Stock Exchange at 1339 IST.  

The company's other income for the reporting quarter more than doubled on quarter to INR 461.6 million. This included a one-time income of INR 271.49 million from the dilution of its stake in joint venture Qorix GmbH. Excluding the one-time income and the tax on it, the company's consolidated net profit for the quarter was INR 2.22 billion. The company also had a foreign exchange gain of INR 2.99 million in the quarter ended March. 

During the March quarter, the rupee depreciated against the euro, the pound sterling, and the yen, and remained flattish against the US dollar, resulting in higher revenue in rupee terms, KPIT Tech said in an investor presentation. In constant currency terms, the company's revenue for the quarter grew 3% on quarter and 15% on year. In dollar terms, the revenue was up 0.7% on quarter and 11.5% on year.

For the financial year ended Mar. 31, the company reported a consolidated net profit of INR 8.40 billion, up over 41% on year. The consolidated revenue for the same period rose nearly 20% on year to INR 58.42 billion. In constant currency terms, the company's revenue for 2024-25 (Apr-Mar) grew 18.7% on year, led by growth in Asia, software-defined vehicles, and passenger car segment, the company said. This was within the revenue growth guidance of 18-22% set by the company for FY25 in constant currency terms.

The company reported consolidated earnings before interest, tax, depreciation, and amortisation of INR 3.23 billion for the March quarter, up around 3.5% sequentially. This marked the 19th consecutive quarter of EBITDA growth for the company, KPIT Technologies said. Its consolidated earnings before interest and tax for the quarter were INR 2.65 billion, up 4.5% on quarter.

The company's EBITDA margin for Jan-Mar remained unchanged on quarter at 21.1%. Its EBIT margin for the quarter improved by 10 basis points sequentially to 17.3%. For FY25, the company reported an EBITDA margin of 21%, in line with its guidance. In the December quarter, KPIT Technologies had scaled up its guidance for EBITDA margin for FY25 to 21% from 20.5%. 

The technology solutions provider booked a total contract value of new engagements worth $280 million for the March quarter. The company had reported a total contract value of $236 million in the previous quarter. "Our investments in adjacencies has yielded results with engagements initiated with two leading truckmakers and one key player in off-highway," said Sachin Tikekar, co-founder and joint managing director of the company, in an investor presentation.

With strong deal wins for strategic engagements, coupled with potential acquisition of specialised companies, the company remained positive about its medium-term growth trajectory, Kishor Patil, chief executive officer and managing director of KPIT Tech, said. Further, the large transformative engagements won by the company are expected to contribute to revenue growth in the first half of FY26, the company said. The company had 65 active clients as of Mar. 31, up from 63 as of Dec. 31. The company's total employee headcount increased to 12,873 from 12,795 a quarter ago.

Revenue from the company's passenger car vertical fell 2.2% sequentially to $140.75 million for the March quarter, but was up 12% on year. Its revenue from the commercial vehicles segment grew marginally on quarter but fell 2.5% on year to $27.07 million. The company's feature development and integration vertical reported a revenue of $104.48 million, down 4.3% on quarter. Its architecture and middleware consulting vertical reported a 13% sequential rise in revenue to $40.38 million, while its cloud-based connected services vertical reported a 4% sequential rise to $32.45 million. Revenue from all verticals barring commercial vehicles increased on a year-on-year basis.

Geographically, Asia led the revenue growth in dollar terms for the quarter. Revenue from operations in Asia grew 10% sequentially to $51.17 million in the March quarter. Operations in the US contributed $49.13 million to the company's revenue, up 5.9% on quarter. However, its revenue from operations in Europe fell 7.4% sequentially to $77 million. 

In rupee terms, revenue from the Americas for the latest quarter grew over 11% sequentially to INR 4.35 billion. Revenue from the UK and Europe fell nearly 6% on quarter to INR 6.91 billion. Revenue from the rest of the world rose over 9% on quarter to INR 8.46 billion.

The company's total expenditure for the quarter rose over 3% sequentially to INR 12.73 billion. This was on the back of an over 3% sequential rise in its employee benefits expense to INR 9.55 billion, which accounted for over 75% of the company's total expense. For the latest quarter, other expenses of the company rose marginally on quarter to INR 2.29 billion, while its finance costs fell nearly 11% on quarter to INR 92 million. 

Apart from the quarterly earnings, the company announced a final dividend of INR 6 per share for FY25. The company's board has also approved the merger of its wholly-owned subsidiary, PathPartner Technology Pvt. Ltd. with the parent company. After the merger, PathPartner will be dissolved without being wound up, KPIT tech said.  End  

US$1 = INR 85.03

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta and Akul Nishant Akhoury

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