• Revenue Growth: 20.1% year-on-year in constant currency terms; 19.3% in dollar terms.

• EBITDA Margin: 20.8%, reflecting a 27.7% year-on-year growth.

• Profit After Tax (PAT): INR 203 crores, including a one-time profit of INR 29.3 crores from an insurance claim.

• Passenger Car Growth: 5.3% quarter-on-quarter and 26.4% year-on-year.

• Fixed Price Projects: Significant growth contributing to increased profitability.

• Attrition Rate: Lowest ever, aiding in workforce stability.

• Quarterly Wins: USD 207 million across geographies.

• Guidance: Revenue expected on the lower side of guidance; profits on the higher side, with a slight increase in profit margin expectations.

• Warning! GuruFocus has detected 2 Warning Sign with BOM:542651.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• KPIT Technologies Ltd (BOM:542651) reported a strong revenue growth of 20.1% year-on-year in constant currency terms, driven largely by the Asian markets, particularly Japan, Korea, and India.

• The company achieved an EBITDA margin of 20.8%, marking a 27.7% year-on-year growth, despite absorbing salary increments and additional costs.

• KPIT Technologies Ltd (BOM:542651) has a strong pipeline with current wins totaling USD 207 million across Europe, the US, and Asia.

• The company is experiencing its lowest ever attrition rates, allowing it to focus on building competencies and the right workforce for complex projects.

• KPIT Technologies Ltd (BOM:542651) is exploring inorganic growth opportunities and has taken an enabling resolution to raise capital via QIP, indicating potential future acquisitions to strengthen its market position.

Negative Points

• The company anticipates revenue growth to be at the lower end of its guidance due to some project delays and increased offshoring.

• European OEMs are facing financial struggles, which may impact KPIT Technologies Ltd (BOM:542651)'s growth in that region.

• There is a cautious business environment in the USA, with some tentativeness affecting the realization of large opportunities.

• The company has noted a shift in demand dynamics, with a focus on cost reduction and offshoring, which may impact short-term revenue growth.

• KPIT Technologies Ltd (BOM:542651) faces potential challenges in integrating future acquisitions, which could impact its operational efficiency.

Q & A Highlights

Q: Can you elaborate on the guidance for FY '25, given the current tracking of revenue and EBITDA margins? A: Kishor Patil, CEO, explained that while the pipeline is strong, OEMs are cautious, leading to potential delays in realizing large opportunities. Thus, revenue might be at the lower end of the 18%-22% guidance, but profitability will be on the higher side due to offshoring benefits.