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Informist, Wednesday, Jul. 30, 2025

By Arya S. Biju

MUMBAI – KPIT Technologies Ltd. said it remains bullish on its deal pipeline from clients in India and China and expects to start some of these projects amid the continuing macroeconomic uncertainty that hit client spending during the June quarter, the management said in a post-earnings call with analysts. The company said it is currently working with some original equipment manufacturers in China to get a better understanding of innovation and technology in the automotive segment. 

KPIT Tech is seeing reasonable traction in the Indian market, the management said. "Apart from our current clients and markets, which form a major part of our business, we see opportunities in working on India for India Solutions to help our clients address and establish India-specific products," Kishor Patil, chief executive officer and managing director, said in a post-earnings press release. "Our investments in China,... India, will pay off as we get into the second half of the year and the next year," the management added.

Though the company's revenue from operations in Europe had been declining on a year-on-year basis in the recent past, it expects sales from the region to lead growth for the next several quarters on the back of a strong deal pipeline from clients in the region. "There are many deals in the process... in Europe some of these deals have started ramping up, as I said, slowly (slower) than what we expect, but they have started converting (to revenues)," the management said. The company has the strongest deal pipeline in Europe, the management added. Further, the company is in talks with a European original equipment manufacturer, where it is "in advanced stages of engaging", it said.

In terms of its engagement with automobile manufacturers in Japan, KPIT Tech said it has started advanced talks with three companies other than the one with which it is already engaged. It expects more broad-based growth coming from at least four original equipment manufacturers in Japan towards the end of the financial year 2025-26 (Apr-Mar), the company said.

The company flagged reduced spending by original equipment manufacturers during the June quarter as clients cut budgets and prioritised the delivery of current programmes more effectively with better quality over new programmes amid the global macroeconomic uncertainty. Scaling up by clients is also not happening because of the uncertainties, it said. "The mobility industry is going through a lot of fluctuations with geopolitical and tariff-led uncertainties," Patil said in a post-earnings presentation, adding, "We believe these will settle down in a quarter."

The company expects growth momentum to pick up in the second half of FY26, with its robust deal pipeline and steady deal closures. "We are confident of growth in H2 (Oct-Mar), led by T25 (top 25) clients, and expect to have growth momentum as we exit the year," Patil said. However, the company expects its earnings before interest, tax, depreciation, and amortisation margin to remain at the current level in the foreseeable future. During the June quarter, its EBITDA margin was 21.0%, largely in line with the 21.1% reported in the previous quarter as well as the year-ago quarter.

The company saw an uptick in fixed-price projects during the quarter, which supported its profitability, the management said. This uptick in fixed-price projects is expected to support the company as it shift towards its new business model.

On the employee headcount, the company said it will continue to hire freshers in future. "We continue to go to campus and get freshers because they are more... AI (artificial intelligence)-amenable and ready to learn more," the management said. Asked about the recent layoffs announced by some information technology companies, the KPIT Tech management said "...we are a bit different than IT and the second thing is we are looking at changing the business model more. If you see KPIT last three years' revenue per person has increased and we do hope that the changes (in business model) will help us to maintain that."

The company announced its June quarter earnings Wednesday. The technology company, which provides engineering research and development services to automotive companies, reported a consolidated net profit of INR 1.72 billion, down nearly 30% on quarter and nearly 16% on year. Its consolidated revenue for the quarter rose marginally on quarter and nearly 13% on year to INR 15.39 billion. Wednesday, shares of the company closed over 4% higher at INR 1,268.50 on the National Stock Exchange.  End

Edited by Rajeev Pai

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