KPIT reports Q1 FY24 results with revenue growth of 51.7% Y-o-Y and maintains revenue and profitability guidance

KPIT Q1FY2024 Performance Overview

Q1FY24 CC Revenue grows 51.7% Y-o-Y
Q1FY24 Profit (PAT) grows 56.9% Y-o-Y

Revenue

Reported $ Revenue growth of 49%
Y-o-Y
7.1% CC growth, 8.2% Reported $ growth, Q-o-Q

Net Profit

Q1FY24 Net Profit at ₹ 1,340* M
20.1% Q-o-Q growth in Net Profit
(*In line with IND AS 103, a one-time gain of ₹ 134 M resulting from remeasuring of earlier FMS equity stake at the acquisition date FMV has been taken in Q1FY24, excluding which PAT is ₹ 1,206 M)

EBITDA

EBITDA at 20%
Y-o-Y EBITDA growth of 65.2%, Q-o-Q 13.3%

Wins and Pipeline

$ 190M worth engagements closed in the quarter
Healthy Pipeline level across practices

Q1FY2024 Performance Highlights

Growth led by Strategic Accounts, Middleware and Architecture, Electric Powertrain and Connected Vehicles. Balance 75% stake in FMS acquired during the quarter.
FMS contributed USD 1.7 M to revenue during the quarter

EBITDA margin expansion of 90 bps for the quarter led by revenue growth resulting in fixed costs leverage and operational efficiencies.

Impact of Purchase Price Allocation (FMS acquisition) of ₹ 11.4 M reflected in Depreciation. One time gain of ₹ 134 M accounted for in the quarter, resulting from remeasuring of earlier FMS equity stake, at acquisition date FMV. Q1FY24 other income was higher as compared to last quarter due to lower loss on realization and ₹ depreciation against the Euro & GBP. ETR increased Q-o-Q due to absence of one-time tax credits reported last quarter.

Net Cash at quarter end stood at ₹ 5.26 billion post Acquisition payouts of ₹ 2,429 million (Technica, FMS and Somit). DSO stood at 50 days.

Management Quotes

We have started the year on a positive note and have delivered a robust all-round performance in line with our expectations of a stronger first half. Opportunities remain stronger as mobility players continue to invest in new technologies, in the areas of electrification, vehicle autonomy, connectivity and personalization. We have a healthy pipeline and are slightly ahead in the ramp up of the mega strategic engagements announced last year. This gives us a fair medium-term visibility and we are confident of reaching our stated outlook of revenue growth and operating margins for FY2024.

Kishor Patil

Co founder, CEO and MD, KPIT

We are experiencing greater traction with our strategic clients as we move further in creating trusted partnerships with our clients to help them accelerate their transformation. The attrition has been consistently falling over the last 3 quarters. We are investing in improving the quality of hires and building the right competencies and technologies to enable flawless execution. We have started baselining sustainability and co-creating a roadmap with our employees and look forward to scaling our impact in creating a cleaner, smarter, safer world in the years to come through our offerings, operations, and employees.

Sachin Tikekar

President and Joint MD, KPIT

Deal Wins

TCV of new engagements won during the Quarter : $ 190 million

1

Multiple strategic engagements in autonomous driving, body electronics and diagnostics for a leading European Car Manufacturer

2

A few strategic engagements in the electric powertrain domain for a leading American Car Manufacturer

3

Several engagements in the middleware and architecture consulting and electric powertrain domains for a leading American Car Manufacturer

4

Multiple strategic programs in autonomous driving and body electronics domains for a leading European Car Manufacturer

5

Various strategic engagements in the vehicle engineering and connected domains for a leading American Commercial Vehicle Manufacturer

Financial and operational Data

Profit & Loss Account Snapshot

INR MN

DETAILS Q1FY24 Q4FY23 Q1FY23
Revenue from Operations 10,976.22 10,173.67 6,857.24
Other Income 78.16 62.60 152.89
Gain on account of Business Combinations 134.13 – –
Total Income 11,188.51 10,236.27 7,010.13
Operating Expenses 8,837.42(This includes forex loss of INR 61.32 million) 8,350.16 5,525.51
EBITDA 2,200.12 1,942.57 1,331.73
Depreciation 450.44 422.10 310.23
EBIT 1,749.68 1,520.47 1,021.50
Finance Costs 137.10 106.57 63.43
Change in FMV of Investments 2.79 (0.51) 6.12
Profit Before Exceptional Items 1,766.34 1,356.93 1,117.08
Profit/(loss) of equity accounted investee – 5.10 3.77
PBT 1,766.34 1,362.03 1,120.85
Tax 421.95 246.21 244.26
PAT 1,344.39 1,115.82 876.59
Profit Attributable to owners of company* 1,339.98 1,116.00 854.28
Profit Attributable to non-controlling interest 4.41 (0.18) 22.31

*In line with IND AS 103, a one-time gain of ₹ 134 M resulting from remeasuring of earlier FMS equity stake at the acquisition date FMV has been taken in Q1FY24, excluding which PAT is ₹ 1,206 M

Balance Sheet Snapshot

INR MN

ASSETS Q1FY24 Q4FY23
NON-CURRENT ASSETS
Property, Plant & Equipment 2,141.45 2,143.89
Right-of-use Assets 2,849.68 2,594.34
Other Tangible Assets 83.16 56.43
Goodwill & Other Intangibles 14,293.06 12,374.96
Other Non-Current Assets 1,308.65 1,392.58
TOTAL NON-CURRENT 20,676.0 18,562.20
CURRENT ASSETS
Inventories 863.85 587.50
Cash and Cash Equivalents 5,726.93 6,287.97
Trade Receivables 6,026.95 5,924.40
Other Current Assets 3,211.16 2,643.68
TOTAL CURRENT 15,828.89 15,443.55
TOTAL ASSETS 36,504.89 34,005.75
EQUITY & LIABILITIES Q1FY24 Q4FY23
Equity Share Capital 2,706.02 2,703.46
Other Equity 15,333.75 13,811.92
Equity attributable to owners 18,039.77 16,515.38
Non-controlling interests 123.19 117.56
TOTAL EQUITY 18,162.96 16,632.94
NON-CURRENT LIABILITIES
Borrowings NIL NIL
Lease Liabilities 2,090.72 1,864.28
Other Non-Current Liabilities 2,818.71 3,827.99
TOTAL NON-CURRENT 4,909.43 5,692.27
CURRENT LIABILITIES
Borrowings 465.27 486.03
Trade Payables 2,300.33 1,643.35
Lease Liabilities 546.06 508.88
Others 10,120.84 9,042.28
TOTAL CURRENT 13,432.50 11,680.54
TOTAL EQUITY AND LIABILITIES 36,504.89 34,005.75

Revenue Break-up

Verticals* Q1FY24 Q4FY23 Q1FY23 Q-o-Q Y-o-Y
Passenger Cars 100.53 92.14 66.95 9.1% 50.2%
Commercial Vehicles 28.78 30.75 22.38 (6.4)% 28.6%
Business Units** Q1FY24 Q4FY23 Q1FY23 Q-o-Q Y-o-Y
Feature Development & Integration 82.14 76.21 61.64 7.8% 33.3%
Architecture & Middleware Consulting 28.03 23.83 12.83 17.6% 118.5%
Cloud Based Connected Services 23.77 23.75 15.41 0.1% 54.2%
Geography Q1FY24 Q4FY23 Q1FY23 Q-o-Q Y-o-Y
US 44.91 44.66 34.95 0.5% 28.5%
Europe 68.08 61.40 35.89 10.9% 89.7%
Asia 20.96 17.74 19.04 18.1% 10.1%

*The balance revenues come from others, which is not a big area as of now

**Feature Development & Integration – Electrification, AD-ADAS, Body Electronics and VED Architecture & Middleware Consulting – Middleware, AUTOSAR

Cloud Based Connected Services – Intelligent Cockpit, Digital Connected Solutions and Diagnostics

P&L Metrics

Q1FY24 Q4FY23 Q1FY23 Q-o-Q Y-o-Y
Revenue by Contract Type
Time & Material Basis 55.0% 54.6% 51.0% 8.9% 60.6%
Fixed Price Basis 45.0% 45.4% 49.0% 7.4% 37.0%
Clients
Strategic Client Revenue 82.6% 79.5% 84.9% 12.4% 45.0%
Active Clients (Period End) 60 60 60
Revenue per Devp. Employee USD 49,439 48,092 41,951
R&D Expenditure (USD MN) 3.01 2.74 2.13
EBITDA Margin 20.0% 19.1% 19.4%
EBIT Margin 15.9% 14.9% 14.9%
PAT Margin 12.2% 11.0% 12.5%
Effective Tax Rate 23.9% 18.1% 21.8%
EPS (Basic) 4.95 4.13 3.16
EPS (Diluted) 4.91 4.09 3.13

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KPIT Technologies is a global partner to the automotive and Mobility ecosystem for making software-defined vehicles a reality. It is a leading independent software development and integration partner helping mobility leapfrog towards a clean, smart, and safe future. With 11000+ automobelievers across the globe specializing in embedded software, AI, and digital solutions, KPIT accelerates its clients’ implementation of next-generation technologies for the future mobility roadmap. With engineering centers in Europe, the USA, Japan, China, Thailand, and India, KPIT works with leaders in automotive and Mobility and is present where the ecosystem is transforming.

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