KPIT Technologies reported a sequential increase of 22.16% in net profit to Rs 162.97 crore for the March quarter. The company’s revenues rose by 5.8% to Rs 1,711 crore during the quarter. However, net profit saw a 33% year-on-year decline due to rising costs. The EBITDA margins for Q4 FY24 were maintained at 20.6%.
Two major Software-Defined Vehicle (SDV) programs are concluding in the first half of the fiscal year. The company expects revenue growth to largely offset this decline through new accounts acquired. Continuing these programs would have resulted in an estimated sequential growth of 4%-5%, the company said.
EBITDA margins were affected by increased investments in AI, new products and solutions, competency development, and expansion into new markets. The company allocated 3% of its revenues to research and development, and the reported margins reflect these expenditures.
During the March quarter, KPIT secured engagements worth $349 million, which included two significant strategic wins. KPIT’s growth was primarily driven by advancements in the connected vehicle, after-sales, virtual engineering, and propulsion sectors.
What did Kishor Patil say?
Kishor Patil, co-founder, CEO, and Managing Director of KPIT, said the winding down of two SDV deals: one with Honda, which is transitioning from an electric vehicle program to focus on hybrid and internal combustion engine (ICE) vehicles, and another with Renault, which concluded naturally. Patil said that the company plans to offset this impact by signing new contracts in the truck and off-highway segments. There is notable demand in the US, China, and India for AI-defined machines.
For FY27, EBITDA margins are projected to be between 20.5% and 21.2%. The company’s goal is to reach margins of 22% to 24% by FY28.
Patil expressed optimism about FY27, indicating increased revenue growth visibility and market opportunities. He acknowledged that trade and geopolitical uncertainties had previously impacted the mobility industry, hindering investments in new platforms. However, he noted that conditions have improved, providing ample growth potential in automotive software. “AI is now central to automotive engineering and favours domain-focused players, as Automotive AI must comply with safety and regulatory standards,” he stated.
KPIT has also established a strategic long-term partnership worth over $50 million with a global off-highway equipment and machinery manufacturer, focusing on large-scale, software-defined transformations of next-generation machine platforms. Additionally, the company has partnered with a leading Japanese Tier 1 supplier to develop next-generation digital cockpit programs for multiple global original equipment manufacturers (OEMs).
The KPIT Mobility Intelligence Product (Beacon) has generated significant interest from major OEMs and is being adopted by multiple manufacturers. The company has made a pivot towards AI-led products and solutions to enhance long-term value creation for clients.
Sachin Tikekar, President and Joint Managing Director at KPIT, highlighted that OEMs are under considerable pressure to quickly introduce new products and features to stay competitive while simultaneously facing stringent cost constraints. He noted that KPIT is actively implementing AI-infused solutions to help OEMs reduce their time-to-market, thereby increasing market share. “The off-highway and micromobility segments, alongside the automotive industry, will be key drivers of our growth,” Tikekar added.