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KPIT Technologies Ltd.

BSE: 542651 Sector: IT
BSE 00:00 | 07 Dec 710.20 -4.80






NSE 00:00 | 07 Dec 710.25 -5.15






OPEN 713.05
VOLUME 25824
52-Week high 800.00
52-Week low 440.00
P/E 71.45
Mkt Cap.(Rs cr) 19,469
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 713.05
CLOSE 715.00
VOLUME 25824
52-Week high 800.00
52-Week low 440.00
P/E 71.45
Mkt Cap.(Rs cr) 19,469
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KPIT Technologies Ltd. (KPITTECH) - Chairman Speech

Company chairman speech

Dear Fellow KPITians

It is my pleasure to pen this annual Letter to you.

In this letter I would like to talk about our journey so far the roadthat we see ahead of us and sustainability a key driver for our work.

You would recollect that in the year 2018 we took a major strategicdecision to be a company focussed on automotive-embedded software rather than being ageneral software company i.e inch-wide mile-deep rather than mile-wide inch-deep.

We committed ‘to know automotive better than any other softwarecompany in the world and to know software better than any automotive company'.

Since then we have seen the automotive and mobility industryundergoing a once-in-a-century transformation toward Software-Defined Vehicles (SDV). Thisis in line with the goal of the industry to achieve global sustainability. We havecontributed to this transformation.

Let me now turn to the current status and the way forward.

Performance of the year gone by

The Company turned in a stellar performance in FY 2022 with over 19.5%growth in the top line and 28% volume growth. The total revenues from operations were Rs24323.86 million (~ $ 328 million) and EBITDA stood at Rs 4385.45 million (~ $ 59million) with a growth of 41.4% over last year. The year ended with a net PAT of Rs2762.43 million (~ $ 37 million 87% Y-O-Y growth) and saw continued focus on cashconversion with 13 consecutive quarters of net cash increase.

In line with our T-25 client strategy we ensured deepened focus andstrategic relationships - the last year saw more than 80% of the revenues come from theseT-25 clients.

As you would recollect when we restructured our company we hadannualized revenues of $ 280+ million EBITDA Margins of 12.8% and a staff strength of6600+. In the last quarter of FY 2022 our annualized revenues were $ 348+ million andEBITDA margins were 18.6%. The actual volume of work done is reflected in our staffstrength which grew from 6614 to 8245 in the last quarter. We can certainly say that wehave - amongst the largest team of embedded software engineers in the world. We work withthe top 25 automotive OEMs and Tier Is in the world.

Today there are over 10 million vehicles around the world which use oursoftware.

We are satisfied that our strategy is yielding results for our clientsour employees and all of you our shareholders.

Living in uncertain times

The world is at the cusp of a major change.

All Industries including the automotive and mobility industry areundergoing a major transformation.

Climate change accentuated by globalisation challenges and globalconflicts is driving this transformation.

As a leader operating in the automotive and mobility software space wethink we can contribute to addressing some of these challenges through the technologysolutions that help the automotive industry move towards a cleaner smarter and saferfuture.

As a company we are hoping to provide a beacon of hope in our ownsmall way in these times of darkening skies.

Transformation of the automobile and mobility industry

Automobiles now are ‘Software on Wheels'.

Electronics in the form of ECUs sensors and advanced chipsets workwith millions of lines of code and play a differentiating role in the automotive industry.

They enable newer business models and disrupt technology across CASE(Connected Autonomous Shared Electric) domains.

Vehicle manufacturers and suppliers are investing heavily to developthe SDVs of tomorrow. With the rising confluence of technology and automobiles thevehicle software market is predicted to reach $ 35 billion (growing at a CAGR of 9%) by2025. Software applications operating systems and middleware are growing at an evenfaster rate at a CAGR of 11%. Overall the vehicle software market is expected to nearlydouble by 2030 fuelled by the digital push among top OEMs and a dramatic increase intheir investments.

However as the role of software and data grows so does itscomplexity thus making it necessary for the automotive industry to build deep softwarecompetence. OEMs and suppliers are facing the challenges to strengthen their softwarecapability and incorporate the needs of SDVs in product development organisationalstructure personnel structure and operating system. The automotive and mobility industryis transforming itself and we endeavour to help this transformation.

In this regard over the last two decades KPIT has focussed andinvested in the areas of software development integration and validation to buildexpertise and global scale. This is the essence of our vision - ‘Reimagining mobilitywith you for the creation of a cleaner smarter and safer world'. This vision alongwith mission statements and the initiative of Culture of Excellence drives theCompany's strategy and operating guidelines.

In line with our mission statement we are focussed on driving thefollowing four initiatives.

• Leader in Platforms and Practices

• Zero Defect Delivery - First time right

• Best Place to Grow for our employees

• Focus on T25 Clients

You will read more about them in the pages to follow.


Much before sustainability became a global thrust and a legalcompliance requirement we at KPIT have been strongly committed to it. To ussustainability includes financial sustainability of the company (you have read about itearlier in this letter) environmental sustainability and social sustainability to improvethe lives of people.

I would like to share with you the actions that we have taken in thisregard so far. Our actions can be broadly put into the following three categories-

1. The work we do and the solutions we offer

2. The way we work and carry out our operations

3. The way we engage with society through our Corporate SocialResponsibility initiatives in every market that we operate in.

Let me now turn to each one of them.

1. The work we do and the solutions we offer:

We work with our clients in areas of electrification autonomousdriving connected vehicles software standardization and vehicle engineering and design.Almost 40% of our revenues are from programmes and software for the next-gen electricvehicles and from increasing the efficiencies of conventional drivetrains. This trulycontributes to environmental sustainability. Through the solutions in the areas ofautonomous driving software connectivity technologies and predictive diagnostics we aresupporting the creation of safer and more efficient vehicles. Our esteemed Board Membersand the team of advisors are experts in the industry guiding us to deliver qualityinnovative and sustainable solutions.

We keep investing in new technologies that will strengthen ourofferings. We invest regularly in our research and development. We also invest inacquisitions to strengthen our knowledge portfolio. Through our work on green hydrogengeneration sodium-ion batteries hydrogen fuel cells and more efficient powertrains weare strengthening the efforts toward green transportation.

2. The way we work and carry out our operations:

We strive to contribute towards sustainable operations and minimise theimpact on the environment through our global offices. I am describing some of the keyinitiatives in this regard - we have converted an open car park of over 8000 sq mts intosolar-powered parking capable to generate up to 662 Kwp energy saving up to 47% of annualenergy requirements for the Pune campus.

During the year we shifted from a conventional desktop technology toVirtual Desktop Interface (VDI) which resulted in an over 60% reduction in energyconsumption. The desktop computers that consume around 150 watts of electricity werereplaced with very small devices called ‘thin clients' that consume just 30watts. This has resulted in energy savings of ~300000 units per year amounting to 375MT of CO2 emission. Further during the year we covered around 4 acres of land as a greenbelt with a plantation of 1333 native trees shrubs and flowering plants.

3. The way we engage with society through our Corporate SocialResponsibility initiatives:

KPIT has a strong social commitment to every community that it livesin. We fulfil this commitment both by employee participation and by financialcontribution. Our conviction is that we can build a truly sustainable society by teachingscientific and environmentally friendly approaches to students across the educationalchain.

We undertake multiple initiatives in the education sector to transformlives through science and technology education. ‘Chhote Scientists' (YoungScientists) is one such initiative we undertake to kindle the love for science amongschool-going children. Through easy-to-make and fun-to-learn scientific toys we taught27431 children in 430 schools across Maharashtra Jharkhand Karnataka Assam andNagaland during the year.

We intend to take this number to 100000 students over the next threeyears. We believe that through this initiative we can build a society which thinksrationally and sensitively about the world around us.

The eighth edition executed this year of KPIT Sparkle one ofIndia's biggest innovation platforms for Engineering Science and Design studentsreceived more than 1300 ideas from over 15000 students across more than 800 colleges inIndia. We have helped incubate many start-ups that are focussed on greener and saferenergy and transportation.

Further the KPIT Shodh Awards - to recognise and celebratehigh-quality and original research work displayed in PhD thesis - attracted participationfrom 55 outstanding young PhD researchers. The researchers submitted 30 theses for the‘Best Thesis Award' in the categories of Energy Storage Energy Generation FuelCell and ADAS for Automotive Applications.

KPIT collaborated with Wildlife Research & Conservation Society(WRCS) 14 Trees Foundation (14TF) and Ecological Society Pune for building sustainablecarbon-footprint-neutral ecosystems through reforestation. Over the past few years wehave planted over 49500 plants with an over 80% success rate. This has helped theenvironment as well as created employment for locals.

Looking to the future our goal is to deliver sustainable performanceto ensure long-term growth and profitability while ensuring global sustainability. Toachieve this the focus and commitment of all KPITians is imperative. This is our promiseand we are confident that results will follow.

We look to all our stakeholders for their continued support and Iremain extremely excited about our journey going forward.

Sincerely yours

S.B. (Ravi) Pandit