KPITTECHNSEAugust 6, 2025

KPIT Technologies Limited

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14analyst exchanges

5executives

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Management on call

Kishor Patil

CO-FOUNDER, CHIEF EXECUTIVE

Sachin Tikekar

CO-FOUNDER AND JOINT

Priya Hardikar

CHIEF FINANCIAL OFFICER – KPIT TECHNOLOGIES LIMITED

Sunil Phansalkar

VICE PRESIDENT OF CF&G,

Rahul Jain

DOLAT CAPITAL MARKETS LIMITED

Key numbers — 19 extracted

12.8%

l. I will just go through quickly the key highlights of the quarter. year-on-year growth has been 12.8% in rupee terms and 7.8% in dollar terms. EBITDA has grown year-on-year by 12.4%. We are very ha

7.8%

uickly the key highlights of the quarter. year-on-year growth has been 12.8% in rupee terms and 7.8% in dollar terms. EBITDA has grown year-on-year by 12.4%. We are very happy that in these uncertai

12.4%

r growth has been 12.8% in rupee terms and 7.8% in dollar terms. EBITDA has grown year-on-year by 12.4%. We are very happy that in these uncertain times, the EBITDA remained strong at 21%. EBIT was

21%

n-year by 12.4%. We are very happy that in these uncertain times, the EBITDA remained strong at 21%. EBIT was at 17%. PAT is INR 1719.1 Mn. There is a variance as compared to the last quarter, ba

17%

are very happy that in these uncertain times, the EBITDA remained strong at 21%. EBIT was at 17%. PAT is INR 1719.1 Mn. There is a variance as compared to the last quarter, basically because of

INR 1719.1

happy that in these uncertain times, the EBITDA remained strong at 21%. EBIT was at 17%. PAT is INR 1719.1 Mn. There is a variance as compared to the last quarter, basically because of the onetime income w

INR272 million

e had last time because of QUALCOMM’s investment into Qorix as well as a net negative impact of INR272 million because of the currency changes. The wins during the quarter have been $241 million. The growth h

241 million

impact of INR272 million because of the currency changes. The wins during the quarter have been $241 million. The growth has been mainly in powertrain and connected areas, both across U.S.A. and Europe and

60%

r down the line. In terms of overall quality of the revenue, fixed price projects have moved from 60%, to 62.5%. It is very KP 11· important because this allows us moving to t

62.5%

he line. In terms of overall quality of the revenue, fixed price projects have moved from 60%, to 62.5%. It is very KP 11· important because this allows us moving to the busines

rs,

and also based on some of the wins we had. I think we have this pipeline based on the passenger cars, but we believe that in the Commercial Vehicle vertical -- there will also be growth in off-highway

20%

y're looking at those spends. So that is one. Second is, I think, see, we have seen a good almost 20% growth in deal wins, right, both on a TTM basis and year-on-year basis. Now for the older deals

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Guidance — 20 items

Kishor Patil

opening

“We believe that along with our products and platform strategy and this AI- based solutions, we will be in a position to have certain wins and H2 will be higher than H1.”

Kishor Patil

“I KP 11· believe in a quarter or so, I think there will be more certainty.”

Kishor Patil

“And we believe as it settles down, I think the clients, even though there will be an additional cost, I think at least there will be a certainty to some extent.”

Kishor Patil

“I mean, that you have seen one announcement today, it will start kicking in to a certain extent even though it is initial, it will start in Q3, it will be small to begin with, but it will start scaling up over the next 3 years or so.”

Nitin Padmanabhan

“So first is, I think, we have had a lot of OEMs make a lot of announcements, like I think Honda spoke about their change in plans on or at least pushing out plan from an EV time line perspective and a lot of things, Daimler today, there was a new guidance on lower volumes and so on and so forth.”

Kishor Patil

“Tikekar mentioned, it is an area where most of the project programs are in the process of validation, right?”

Aman Soni

“My first question is on new tie-up, as JSW Motors first new New Energy vehicle is expected to reach the market in the second half, can we assume that like you mentioned in the opening remarks as well, Q3, we will be starting the execution.”

Kishor Patil

“We don't like to comment on more details on the client project.”

Kishor Patil

“And a lot of work we will be bringing in what assets we have, and we will be adapting it more for India market–This will be about 3 years kind of a program.”

Kishor Patil

“So if you look at both these things, I think it will take about 2 to 3 years for us to start getting the license revenue till that time, we expect the factory to be stable, the production to start coming in and achieve a certain threshold from where our royalties kick in.”

Risks & concerns — 13 flagged

We are very happy that in these uncertain times, the EBITDA remained strong at 21%.

— Kishor Patil

There is a variance as compared to the last quarter, basically because of the onetime income we had last time because of QUALCOMM’s investment into Qorix as well as a net negative impact of INR272 million because of the currency changes.

— Kishor Patil

Just one question, Kishor, you mentioned that you expected tariff which are uncertain to settle down in a quarter.

— Bhavik Mehta

But even today's clarity is helping is what I think, as I mentioned, H1 is something which will remain a little unstable or uncertain to some extent, as I have been talking.

— Kishor Patil

I must say, and I have been saying it from the last 2 quarters, that I think the model where you relate head count to revenue will be difficult in future and while we do expect that in some cases, we will still do in short term.

— Kishor Patil

So just to clarify -- sorry, just to clarify on this fixed price mode, is that translating into some near-term pressure on margins in certain geographies where you are seeing this move?

— Manik Taneja

Congrats on a great execution again in a difficult macro.

— Sandeep Shah

Congratulations on good execution in a difficult environment.

— Mihir Manohar

I mean, would it be sufficient for us to offset this slowdown, which is clear in Europe and U.S.

— Mihir Manohar

Second question was on the -- I mean, European OEMs is back-to-back profit cuts, also talks of does it structurally face a challenge for us for the 3% to 5% kind of growth that we, as a player and as an industry, we used to have?

— Mihir Manohar

And through this difficult time, we are going to be their trusted partner.

— Sachin Tikekar

The growth in JPY currency seems like a sharp decline, I think, despite cross currency benefit.

— Abhishek Kumar

So while we understand this was a difficult quarter.

— Abhishek Kumar

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Q&A — 14 exchanges

Just one question, Kishor, you mentioned that you expected tariff which are uncertain to settle down in a quarter. Is this based on client conversations that we're getting confidence that things will start improving from 3Q onwards?

Kishor Patil

Yes. I mean what we see in the newspapers and overall, what you know and what we talk to government and understanding and of course, the clients. I KP 11· believe in a quarter or so, I think there will be more certainty. And right now, we believe because we have a very strong pipeline, and I think the scale-up is not happening because of the uncertainty or wherever there is a priority, the client is coming to us specifically when they really need speed, which is required for the completion of most of their programs. But that comes at a cost of some kind of a cannibalization of the existing bus

The first question is on the overall deals. So have you seen any pickup in terms of the projects which were stalled or delayed due to macro uncertainty in last few months? And do you expect Q2 to stabilize? Or there could be some additional drop in revenue in Q2? Yes, that's the first question.

Kishor Patil

I will tell you about the environment. We don't talk about quarter-to-quarter and anything specific. But I think in quarter 1 as well as quarter 2, the way we see is that if you remember, last year, we had some onetime income, which I mentioned also at the end of the year last time and during the opening remarks here. Many of that income had gone, but I think it has been compensated by the new wins or some of the start of the projects. So already, we see some of that. but I think we –have not ramped up to our expectation in quarter 1 and quarter 2, but we do believe that in H2, sometime in the

I think it's been pretty solid execution in a very tough quarter, both on deal wins and margins. I wanted your thoughts on a couple of things. So first is, I think, we have had a lot of OEMs make a lot of announcements, like I think Honda spoke about their change in plans on or at least pushing out plan from an EV time line perspective and a lot of things, Daimler today, there was a new guidance on lower volumes and so on and so forth. KP 11· So there's a lot happening. It would be good if you could sort of contextualize what is happening from a spend priority perspective if you compare now ve

Sachin Tikekar

So Nitin, let's start with the first question. In terms of the spend, obviously, there is a lot of prioritization, reprioritization that's been done given the cost pressures that are being faced by all the OEMs across the globe. The basic thinking is they're making investments in the features that make sense and that they have to bring into production immediately in order to remain competitive. And there are two specifics. I think it's becoming a default that everybody has a smart cockpit or an e-cockpit. And secondly, it has Level 2+ autonomy. I think this has become the #1 priority for most

Congrats for the resilient performance despite a tough quarter. My first question is on new tie-up, as JSW Motors first new New Energy vehicle is expected to reach the market in the second half, can we assume that like you mentioned in the opening remarks as well, Q3, we will be starting the execution. So I want to understand like what is the size and scope of this contract, that is one? And is there any strategic correlation between KPIT's recent entry into China and securing this partnership? Given that JSW Motors, India's operations involve a joint venture with the Chinese automotive compan

Kishor Patil

We don't like to comment on more details on the client project. But I may say that this is specific to India program. And a lot of work we will be bringing in what assets we have, and we will be adapting it more for India market–This will be about 3 years kind of a program. And this is much like the other programs we undertake, and I cannot talk about the numbers on this specific program. Got it, sir. And secondly, on this sodium ion battery test. So considering the formal transfer of this technology to Trentar in February '25. Could the management provide an update on the current progress of

My questions are answered. Thank you.

Management

Congrats, good quarter. Just -- you've been talking about making some inroads in China, and now we have a very firm inroad in India as well after this announcement. I just want to -- could you just put some more light on the nature of work in these two geographies, especially China? Is -- what kind of work are we doing? Is it very different from what we've been doing for clients across EU and U.S? What I mean is, are we directly entering the core architecture over there for the Chinese OEMs? Or are we looking at the partnership route through -- to enter these OEMs? If you can explain more on t

Kishor Patil

Look, currently in China, we have at a high level, we are looking at all the three stakeholders. One is global OEMs in China, which we have engaged, our existing clients, and we have engaged some of our existing clients in China. And we are now with a better presence, we are improving our engagement with them. The second thing, which is a little different, because the ecosystem in China is very different. So we are working with some Tier 1s, Chinese Tier 1s, specifically to get a better understanding of innovation and technology, which is coming in certain areas like digital cockpit and autono

Yes. so I'll answer this in 2, 3 ways. One is, of course, our growth has been flattish for the last few quarters and maybe we are expecting another 1 quarter of growth in that range. So, looking at that, of course, we manage our head count based on how we see the next quarters, right? And based on that, what we have done is if you look at for last year, our attrition is around 7% or so on an annual basis. At that range, we have not added, filled the bench as we generally would do. So that's where we are. And naturally, we have continued to hire freshers. We continue to go to campus and get fre

Kishor Patil

Yes, yes. So, I think let me say that we'll start walking before running. So that's how I would put it. And I believe that as we first mentioned, because of the uncertainties, I think the clients -- do not have an extra budget. So, their priorities have changed. I think Mr. Tikekar also explained, right, where they are into production programs they're changing towards most of the people have pushed down their new architecture programs by a year or 2, and they are trying to really make sure that they are in a position to deliver the current programs effectively with a better quality and add som

I basically had some clarification questions with regards to our segmental margins. If you could talk about what's driving the quarterly volatility when it comes to segmental margins, especially when it comes to the European markets as well as the ROW Geography? And the second question is over the course of last couple of years, the 2 large events with Asian OEMs contributed to a significant part of our growth through FY '23 and '25.And when you spoke last quarter, you were simply expecting much more broad base growth in FY '26. Given the way things stand in your commentary regarding the deal

Priya Hardikar

In terms of segmental margins, I think if you look at it is basically recorded basis, Entity financials. Those are getting converted at the currency rates that apply. And this quarter, we have seen some changes. Alongside that, as Mr. Patil mentioned, we have seen a significant change to fixed price based model and that is also driving the changes in the business model and thereby the margins that you see in the segment. KP 11· So just to clarify -- sorry, just to clarify on this fixed price mode, is that translating into some near-term pressure on margins in certain geographies where you are

Sir, my question was, what are the strategies that you have implemented in China market and as well as in India market. And how are you seeing the demand shaping up in next, let's say, 2 to 3 years?

Kishor Patil

I mean, in both the markets as in the India market, we are seeing reasonable traction actually. And we believe that we would like to make sure that we are dominantly present in different parts of the market. And frankly, also beyond business, we bring the best of the knowledge we have across the world to really build ecosystem in India, which will help them in the long term for the industry to compete with the best in the global part. I think that's what we intend to do. And of course, it makes a lot of commercial sense and also growth it includes working with the established OEMs, but also wi

Congrats on a great execution again in a difficult macro. Sir, just one question and some of your remarks implies that the contribution from India and China may go up. In that scenario, it may have some margin impact because margins in this country could be slightly lower versus company average.

Kishor Patil

I would encourage you not to assume that because I think as we talked about, we are changing the business model, trying to do it in a different way using different areas. And over the time, we will also talk about how we are building platforms and products which could become the significant part of our business. I think we are using some of these in these markets to maintain our margins. Okay. This is fair enough. And just last in terms of -- for the exports to happen in China, the invoicing can happen in dollar or in the local currency? It can happen in local currency as well as in dollars. I

Congratulations on good execution in a difficult environment. So I wanted to understand on the China and India pipeline. I mean so how large or how material are this pipeline? Because as of now, I think they don't contribute much to the business. I mean, would it be sufficient for us to offset this slowdown, which is clear in Europe and U.S. part of the piece. Just wanted to get some color around that. And how would be the billing rates here? I mean the billing rates are quite lower versus what the general to robust clients?

Kishor Patil

I encourage you to just look at the answer I gave just now how the margins will keep. The model is not about T&M, the model is not about the bill rates. It is about the overall solution, how we charge the platforms and the products and then the, of course, AI-infused mobility solutions. So these are the changes in the model we are bringing. Of course, we do a normal business also. But with all that, we are comfortable with the margins we can maintain. I will not give any specific numbers, but I can tell you that in 2 years, this will be a 3-digit number in terms of revenues, India, China toget

First question is on TCV number. You guys mentioned in the mid-quarter update that a lot of your deal wins now are cannibalizing your own revenue. So in that context, how should we look at this USD 240 million number? Because this is a gross number from what I understand it might have cannibalized some of the revenues that you're already doing? So maybe 2-part question. One, if you can just tell us what would be the net number, ballpark? Or another way, do you think we need to win more to actually get the same effect as we would have got if we had won maybe USD 240 million maybe a year back?

Sachin Tikekar

Abhishek, there is no doubt that we need to continue to win more because there are tremendous headwinds. And there are three factors, right? So one is last year, we had substantial onetime revenues that were licensed. Second is we also talked about through the different business models in order to help our clients how we are at times, not only cannibalizing the market share of our competitors, but sometimes our own market share. KP 11· And the third factor is the reprioritization of the programs. And that remains fluid for now till the time the uncertainty exists in the minds of the OEMs. And

Congratulations on a good set of numbers. I just want to know your -- just to get a perspective of the hiring process. Now I guess like many company owners are basically saying that they will completely change the hiring process from counting the number of employees to actually sourcing the -- KP 11· what do you say, getting -- focusing on output revenue rather than revenue per employee cut. So what will your company like adopt going forward basically? Do you think that you'll focus on employee count? Or will you look at the gig economy and then say, okay, we will hire employees from time to t

Kishor Patil

So, 2-3 things. Number one, we, of course, are looking at changing the quality of our employees, which is good, and we are investing quite a lot in training and improving their competencies, both in domain as well as on AI side. Understanding of AI and having that mindset is very important to us. So, we do believe that sometimes freshers can do good job. So, we continue to hire them. Basically, our criteria of skills and the competency has changed both for freshers as well as laterals. In terms of gig economy, it's not still as much as prevalent in India. We would like to try it, but it really

So, thank you, everyone, for your active participation on the call, and have a great evening, ahead. Thank you and bye-bye.

Kishor Patil

Thank you. Thank you.

Speaking time

Kishor Patil

Moderator

Sachin Tikekar

Aman Soni

Karan Uppal

Nitin Padmanabhan

Manik Taneja

Priya Hardikar

Sandeep Shah

Mihir Manohar

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Opening remarks

Rahul Jain

Thank you, moderator. Good evening, everyone. On behalf of Dolat Capital, I would like to thank KPIT Technologies Limited for giving us the opportunity to host this earnings call. And now I would like to hand the conference to Mr. Sunil Phansalkar, who is VP, CF&G and Head IR at KPIT to do the management introductions. Over to you Sunil.

Sunil Phansalkar

Thank you, Rahul. A very warm welcome to everyone on the Q1 FY '26 Earnings Call of KPIT Technologies Limited. On the call today, we have Kishor Patil, Co- Founder, CEO and MD; Mr. Sachin Tikekar, Co-Founder and Joint MD; Priya Hardikar, CFO; and myself on the call. As we do always, we'll have the opening remarks by Mr. Kishor Patil on the quarter performance and the way forward. And then we'll have the floor open for your questions. So thank you for joining this call, and I will now hand it over to Mr. Kishor Patil.

Kishor Patil

Hello. Welcome to quarterly investor call. I will just go through quickly the key highlights of the quarter. year-on-year growth has been 12.8% in rupee terms and 7.8% in dollar terms. EBITDA has grown year-on-year by 12.4%. We are very happy that in these uncertain times, the EBITDA remained strong at 21%. EBIT was at 17%. PAT is INR 1719.1 Mn. There is a variance as compared to the last quarter, basically because of the onetime income we had last time because of QUALCOMM’s investment into Qorix as well as a net negative impact of INR272 million because of the currency changes. The wins during the quarter have been $241 million. The growth has been mainly in powertrain and connected areas, both across U.S.A. and Europe and basically in the passenger car vertical. In terms of commercial, there is certain drop, and it is very specific to this year’s ramp down, that happened in a client, which we believe now will go into the growth mode from 1 quarter down the line. In terms of overall q

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