KPIT reports Q2 FY24 results | CC revenue growth of 51.7% Y-o-Y | Upgrades revenue guidance to 37%+, EBITDA margin guidance to 20%+

KPIT Q2FY2024 Performance Overview

Q2FY24 CC Revenue grows 51.7% Y-o-Y

FY24 CC Growth outlook increased to 37%+ from 27% - 30% earlier, EBITDA Outlook increased to 20%+ from 19%-20% earlier

Revenue

Reported $ Revenue growth of 54.2% Y-o-Y
9.0% CC growth, 8.4% Reported $ growth, Q-o-Q

EBITDA

Q2FY24 EBITDA at 20% post wage hikes
Y-o-Y EBITDA growth of 73.7%, Q-o-Q 9.1%

Profit

Q2FY24 Net Profit at ₹ 1,409 M
Y-o-Y PAT growth of 68.7%, Q-o-Q 5.1%* (Q-0-Q PAT growth of 16%+ in Q2FY24, excluding one-time gain of ₹134 million in Q1FY24)

Wins and Pipeline

$ 156M worth engagements closed in the quarter
Healthy Pipeline across practices

Q2FY2024 Performance Highlights

Broad based growth across practices and verticals. Growth led by Strategic Accounts, Passenger Car vertical, Electric Powertrain, Autonomous Driving and Digital Connected Solutions practices.

EBITDA margin maintained at 20% post full quarter impact of wage hikes during the quarter. Gross Impact of wage hikes was 250 bps which was offset by revenue growth and net realization improvement.

Q2FY24 other income was slightly higher as compared to last quarter due to lower loss on realization and gains on hedging contracts. ETR was slightly higher as compared to last quarter, in-line with our annual outlook on ETR. There was a one-time gain of ₹ 134 million last quarter. Excluding this, the Net Profit growth for the quarter was 16.8%

Net Cash at quarter end stood at ₹ 5.12 billion post Acquisition payouts of ₹ 987 million (Technica and FMS) and dividend payout of ₹ 718 million. DSO stood at 47 days.

Management Quotes

Kishor Patil

We are delighted to deliver another quarter, consistent with our robust performance over the last 3 years. Our medium-term business fundamentals and growth drivers remain unchanged. While the geopolitical situation and economic uncertainty across geographies is leading to a softer macro environment, we keep a watchful eye on the impact on our clients and their business priorities. Our clients remain committed to making investments in newer, relevant technologies. Basis our performance so far and near-term visibility, we raise our CC revenue growth outlook for FY24 to 37%+ growth and increase EBITDA margin outlook to 20%+.

Kishor Patil

Co founder, CEO and MD, KPIT

Sachin Tikekar

Our relationships with our Strategic Clients continue to get deeper and wider, leading to increased strategic engagements. We will sharpen our focus further on commercial vehicles in the near term. Attrition continues to move in the right direction. As we focus on effective delivery of complex large engagements, we continue to lay emphasis on zero-defect delivery. We are progressing well on co-creation of the sustainability roadmap with our employees. We are happy on integration of the acquired entities and are on track for achieving stated medium-term strategic objectives.

Sachin Tikekar

President and Joint MD, KPIT

Deal Wins

TCV of new engagements won during the Quarter : $ 156 million

1

Strategic multi year engagement in the autonomous driving domain 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 electric powertrain, autonomous driving and connected domains for a leading European Car Manufacturer

4

A strategic program in the powertrain domain for a leading American Car Manufacturer

5

Various strategic engagements in the connected and vehicle engineering domains for a leading Asian OEM

Financial and operational Data

Profit & Loss Account Snapshot

INR MN

DETAILSQ2FY24Q1FY24Q2FY23
Revenue from Operations11,991.5710,976.227,448.32
Other Income85.9478.1694.90
Gains on account of Business Combinations–134.13–
Total Income12,077.5111,188.517,543.22
Operating Expenses9,592.238,837.426,066.69
EBITDA2,399.342,200.121,381.63
Depreciation480.93450.44327.41
EBIT1,918.411,749.681,054.22
Finance Costs135.70137.1070.31
Change in FMV of Investments8.722.79(1.92)
Profit Before Exceptional Items1,877.371,766.341,076.89
Exceptional Items–––
Profit/(loss) of equity accounted investee––14.36
PBT1,877.371,766.341,091.25
Tax463.36421.95255.60
PAT1,414.011,344.39835.65
Profit Attributable to owners of company1,408.541,339.98834.80
Profit Attributable to non-controlling interest5.474.410.85

Balance Sheet Snapshot

INR MN

ASSETSQ2FY24Q1FY24
NON-CURRENT ASSETS
Property, Plant & Equipment2,174.942,141.45
Right-of-use Assets2,818.332,849.68
Other Tangible Assets42.1883.16
Goodwill & Other Intangibles14,211.2114,293.06
Other Non-Current Assets1,287.731,308.65
TOTAL NON-CURRENT20,534.3920,676.0
CURRENT ASSETS
Inventories890.50863.85
Cash and Cash Equivalents6,275.165,726.93
Trade Receivables6,926.296,026.95
Other Current Assets2,819.663,211.16
TOTAL CURRENT16,911.6115,828.89
TOTAL ASSETS37,446.0036,504.89
EQUITY & LIABILITIESQ2FY24Q1FY24
Equity Share Capital2,710.132,706.02
Other Equity15,862.0615,333.75
Equity attributable to owners18,572.1918,039.77
Non-controlling interests131.20123.19
TOTAL EQUITY18,703.3918,162.96
NON-CURRENT LIABILITIES
BorrowingsNILNIL
Lease Liabilities2,054.932,090.72
Other Non-Current Liabilities2,827.002,818.71
TOTAL NON-CURRENT4,881.934,909.43
CURRENT LIABILITIES
Borrowings1,151.21465.27
Trade Payables2,491.952,300.33
Lease Liabilities549.90546.06
Others9,667.6210,120.84
TOTAL CURRENT13,860.6813,432.50
TOTAL EQUITY AND LIABILITIES37,446.0036,504.89

Revenue Break-up

Verticals*Q2FY24Q1FY24Q2FY23Q-o-QY-o-Y
Passenger Cars110.07100.5369.309.5%58.8%
Commercial Vehicles29.0628.7823.751.0%22.4%
Business Units**Q2FY24Q1FY24Q2FY23Q-o-QY-o-Y
Feature Development & Integration89.7282.1464.869.2%38.3%
Architecture & Middleware Consulting29.4028.0312.044.9%144.2%
Cloud Based Connected Services26.0823.7717.269.7%51.1%
GeographyQ2FY24Q1FY24Q2FY23Q-o-QY-o-Y
US44.1544.9134.81(1.7)%26.8%
Europe76.3768.0841.1112.2%85.8%
Asia24.6920.9618.2417.8%35.4%

*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

Q2FY24Q1FY24Q2FY23Q-o-QY-o-Y
Revenue by Contract Type
Time & Material Basis48.6%55.0%53.5%(4.2)%40.1%
Fixed Price Basis51.4%45.0%46.5%23.8%70.5%
Clients
Strategic Client Revenue84.0%82.6%85.4%10.3%51.7%
Active Clients (Period End)606060
Revenue per Devp. Employee USD51,77349,43940,569
R&D Expenditure (USD MN)3.313.012.23
EBITDA Margin20.0%20.0%18.5%
EBIT Margin16.0%15.9%14.2%
PAT Margin11.7%12.2%11.2%
Effective Tax Rate24.7%23.9%23.4%
EPS (Basic)5.204.953.09
EPS (Diluted)5.164.913.06

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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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