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KPIT Technologies Ltd Interim / Quarterly Report 2023

Apr 26, 2023

59234_rns_2023-04-26_f171ff3c-493c-4f1c-b319-5bfa1a5ef636.pdf

Interim / Quarterly Report

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April 26, 2023

BSE Limited

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001.

National Stock Exchange of India Ltd., Exchange Plaza, C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai – 400051.

Scrip ID: KPITTECH Scrip Code: 542651

Symbol: KPITTECH Series: EQ

Kind Attn: The Manager, Department of Corporate Services

Kind Attn: The Manager, Listing Department

- Subject: Investor Update – Q4 FY 2023.

Dear Sir / Madam,

Please find enclosed the investor Update – Q4 FY 2023.

Kindly take the same on your records.

Thanking you.

Yours faithfully,

For KPIT Technologies Limited DESHPANDE NIDA Digitally signed by DESHPANDE NIDA YUNUS YUNUS Date: 2023.04.26 13:47:20 +05'30' Nida Deshpande Company Secretary & Compliance Officer

Encl.: - as above

KPIT Technologies Limited O +91 20 6770 6000 Registered & Corporate Office: Plot No. 17, Rajiv Gandhi Infotech Park, MIDC-SEZ, Phase-III, E ~~Maan, Taluka-M~~ [email protected] ulshi, Hinjawadi, Pune-411057, India. W kpit.com CIN: L74999PN2018PLC174192

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Reimagining Mobility with YOU

April 26, 2023 Investor Update Q4FY23 | FY23

KPIT Technologies Ltd.

Forward Looking Statements

Some of the statements in this update that are not historical facts, are forward-looking statements. These forward-looking statements include our financial and growth projections, as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the competitive market for the type of services and solutions that we offer, market conditions that could cause our clients to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry. In certain cases, the numbers reported in this update might be rounded off to the nearest whole number.

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2

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• 1 March 2021

Performance Overview Q4FY23 | FY23 Reimagining Mobility withYOU

Performance Overview

M Reported $ Revenue growth of 42.1% Y-o-YQ4 FY23 1 1 Revenue 8.5% CC growth, 12.1% Reported $ growth, Q-o-Q

Q4FY23 CC Revenue grows 50% Y-o-Y FY23 Revenue grows 36.7% in CC terms

Q4 FY23 2 Profit

EBITDA at 19.1%, 60% Y-o-Y growth Net Profit at ₹ 1,116 million, 41.5% Y-o-Y growth

FY23 Reported $ Revenue Growth of 27.4% 3 Revenue FY23 Reported Revenue $ 418 Million FY23 EBITDA at 18.9%, growth of 45% over FY22 4 Profit Net Profit at ₹ 3,810 Million, 39% growth over FY22 FY24 CC Revenue growth in the range of 27% to 30% 5 Outlook EBITDA margin to be in the range of 19% to 20%

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Performance Highlights

Growth led by Strategic Accounts, Middleware and Architecture, Autonomous and Diagnostics. Technica 01 revenues as to last marginally up compared quarter. Q4FY23 also witnessed strategic new engagement closures.

EBITDA margin expansion of 60 bps for the quarter led by revenue growth and operational efficiencies. Impact of 02 Purchase Price Allocation relating to Technica Acquisition reflected in Deemed Interest on Depreciation. payments related to deferred payouts is reflected in Finance Costs.

Other income for the quarter depicted a loss of ₹ 56 million as compared to a profit of ₹ 210 million in Q3FY23. 03 Q3FY23 income was higher on account of rupee depreciation against the Euro and GBP Net Cash at quarter end stood at ₹ 5.8 billion post Acquisition payouts of ₹ 682 million (PathPartner and and Interim Dividend of ₹ 400 million. DSO stood at 04 Somit) 54 days. Final Dividend of ₹ 2.65 per share. Total FY23 Dividend of ₹ 4.10 share per

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Additional facts - timeseries

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----- Start of picture text -----

Revenue $ M
123.8
110.5
[89.9][ 94.2]
[87.1]
[83.7]
71.1 [72.8] [77.2] [76.9] [76.9] [74.5] [77.2] [80.4]
65.3 65.3 [69.7]
EBITDA ₹ M
1,943
1,699
931 [981] [1,0411,1501,214][1,332][1,382]
639 [739] [727] [737] [751] 662 [697] [811]
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Consistent Performance

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11 Consecutive Quarters of Steady Revenue Growth

11 Consecutive Quarters of Steady EBITDA Growth

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Management Quotes

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Commenting on the performance of FY23, Ravi Pandit, Co-founder and Chairman, KPIT said,” The Mobility Industry is one of the larger contributors to global carbon footprint. Huge investments are being made and planned towards a sustainable future. We are proud to be intensely involved in this over the years and we will be a major technology led contributor towards this transformation. We are committed to achieve our vision of creating a Cleaner, Safer and Smarter world. FY23 was another satisfying year of sustainable growth and margin expansion, and we are excited and confident about our performance going forward.

Kishor Patil, Co-founder, CEO and MD, KPIT said,” We have consistently delivered eleven of in revenues and On the back of a sequential quarters healthy growth operating profits. solid quarter and year performance and basis recent mega engagements and committed spend on software by our Strategic Clients, we are witnessing robust demand and increased visibility for the next 3-4 years. We are focused on helping our clients create new business models to transform their business. We start FY24 on a strong footing and expect to deliver CC revenue growth of 27%-30% with EBITDA margins between 19%-20%.”.

Sachin Tikekar, Co-founder and Joint MD, KPIT said, ” We start FY24 on the back of closure of key strategic, long-term engagements with Q4 wins TCV of $ 423 Million. We will focus on alignment and collaboration of practices to address larger problems of our clients through broader technology solutions. We are committed to building scale through robust competency framework, flawless execution and on-boarding the right talent with higher competency. We will channelize our investments towards creating trusted partnerships with our clients to effect greater value creation, in the coming years”.

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Cash Flow – Major Movement

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----- Start of picture text -----

₹ M
Increase in Working
Capital – 1,971
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PathPartner Payout – 522
SOMIT Payout - 160
Capex – 210
Interim Dividend - 400
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Cash and Cash Equivalents break-up ₹ M In Investment Accounts (in India) 1,338 In Investment Accounts (outside India) 1,148 In Operating Accounts 3,802 TOTAL 6,288

NET CASH (₹ M) Q4FY23 Q3FY23 Gross Cash 6,288 7,235 Long Term Debt NIL NIL Short Term Debt 486 493 NET CASH 5,802 6,742

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DSO Q4FY23 end : 54 Days

  • Debt in the books of Technica which will be repaid over the next 3 quarters

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New Engagements

TCV of new engagements won during the Quarter : $ 423* million

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Honda selected KPIT as a strategic technology partner to realize the journey of Honda’s Software-Defined Mobility (SDM) (already announced mid-quarter)

A strategic engagement in middleware development and integration domain for a leading American Car Manufacturer

A strategic engagement in the electric powertrain domain for a leading European Car Manufacturer

Multiple engagements in the vehicle engineering design and connected domains for a leading American Commercial Vehicle Manufacturer

Multiple strategic programs in the connected vehicle domains for a leading Asian Car Manufacturer.

A strategic engagement in the electric powertrain domain for a leading European Car Manufacturer

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  • Includes TCV of ~ $ 250 Million for strategic engagement with Honda

Strategic Update

KPIT and ZF agree to create an independent company focused on creation of automotive middleware stack

Both KPIT and ZF will initially contribute cash plus related software assets (IPs) to the company

Induction of additional partner(s) within 12-18 months. Regulatory approvals expected in 3-4 months

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FY24 Outlook

Practice & Technology Alignment of Practices towards SDV. Technology Investments in related areas. Cross – practice collaboration, AI adoption

CC Revenue growth in the range of 27% to 30%

EBITDA Margin in the 19% to 20%

Delivery and Operations Robust competency framework and relentless execution. Agile methodology adoption. Building scale via automation and productivity

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People

Improvement in quality of incoming talent. Focus on technical and managerial leadership development.

range

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Strategic Clients

Deepen Strategic Relationships by building proactive solutions to enhance value delivered to clients. Deliver consistent client experience Profitability

Improve Rate Realization with focus on gross margin improvement. Levera e rowth and enhance eo le mix across the ramid g g p p py

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• 1 March 2021

Other Updates

Q4FY23

Reimagining Mobility withYOU

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KPIT won two ET Ascent Business Leader of the Year Awards

KPIT has been chosen as the Most Admired Company of the Year, from 30 different sectors & industries across India.

In addition, KPIT CEO, Mr. Kishor Patil, won the Best CEO of the Year Award, a great recognition of his vision and leadership.

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KPIT Sparkle Announced Winners of the 2023 Innovation Challenge

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KPIT hosted the finale of KPIT Sparkle 2023, an annual national design and development innovation contest for Engineering, Science, and Design students, at their Pune campus on 19th March 2023.

12,000 students from 646 colleges participated with 1,000 Ideas

Winners of KPIT Sparkle 2023 in multiple categories received total cash prizes of ₹ 1.1 Million

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KPIT Presented the 3rd Edition of Women In Mobility: A Look at Women Driving Change in the Tech World

KPIT hosted the 3rd Edition of Women In Mobility, a panel session featuring some of the most inspiring women in tech. The panelists shared their experiences, insights, and strategies for success, and offered invaluable advice to women looking to make a mark in tech.

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KPIT wrapped up vSolve 2023, the problem-solving competition for students by Chhote Scientists

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Over 227 bright young minds from 56 different schools came together to showcase their love for science and innovation at vSolve 2023. The energy and enthusiasm was simply electric, as students showcased incredible solutions to the problem statements presented to them.

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Being a Socially Responsible Company

KPIT has constructed a well in Nalvat village, providing the community with a sustainable & reliable source of water.

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The people of Nalvat are now self-sufficient and don't need to rely on unpredictable monsoons or travel far to meet their daily requirements.

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KPIT – Societal Development Commitment

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----- Start of picture text -----

• Water Conservation • KPIT SPARKLE (Engg. Innovation)
• Forest Conservation • SHODH (PhD researchers)

Chotte Scientists (School Children)
ENVIRONMENT EDUCATION
Transforming lives of
Making this world a
people through science &
better place to live in
technology education
KPIT SOCIETAL
DEVELOPMENT
Developing innovative COMMITMENT
Utilizing employee
solutions for efficient
strength to make a
energy consumption difference
and renewable supply
ENERGY ENGAGEMENT
• •
Alternate Energy Dedicated Time
• •
Renewable Energy Volunteer Development

COVID Warriors
----- End of picture text -----

KPIT is a Socially Responsible Corporate Citizen in each country it works

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• 1 March 2021

Financial & Operational Data

Snapshot

Reimagining Mobility withYOU

INR MN

Profit & Loss Account Snapshot

DETAILS
Q4FY23
Q3FY23
Q4FY22
FY23
FY22
DETAILS
Q4FY23
Q3FY23
Q4FY22
FY23
FY22
DETAILS
Q4FY23
Q3FY23
Q4FY22
FY23
FY22
Revenue from Operations
10,173.67
9,171.15
6,517.65
33,650.38
24,323.86
Other Income
62.60
210.59
127.54
401.92
397.42
Total Income
10,236.27
9,381.74
6,645.19
34,052.30
24,721.28
OperatingExpenses 8,350.16 7,472.50
5,303.69
27,295.80
19,938.40
EBITDA
1,942.57
1,698.65
1,213.96
6,354.58
4,385.46
Depreciation
422.10
404.05
307.18
1,463.79
1,196.14
EBIT
1,520.47
1,294.60
906.78
4,890.79
3,189.32
Finance Costs
106.57
82.82
70.46
323.13
193.95
Change in FMV of Investments
(0.51)
(29.37)
2.93
(25.68)
50.67
Profit Before Exceptional Items
1,356.93
1,393.0
966.79
4,943.90
3,443.46
Exceptional items
-
-
-
-
-
Profit/(loss) from equity accounted investee
5.10
0.74
5.37
23.97
1.98
PBT
1,362.03
1,393.74
972.16
4,967.87
3,445.44
Tax
246.21
353.17
166.28
1,099.24
683.01
PAT
1,115.82
1,040.57
805.88
3,868.63
2,762.43
Profit Attributable to owners of Company
1,116.00
1,004.90
788.77
3,809.98
2,742.33
Profit Attributable to non-controllinginterest
(0.18)
35.67
17.11
58.65
20.10

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This includes forex loss ofINR119.06 Million which is excluded in EBITDA computation

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INR MN

Balance Sheet Snapshot

ASSETS Q4FY23 Q3FY23 EQUITY & LIABILITIES Q4FY23 Q3FY23
EquityShare Capital 2,703.46 2,701.55
NON-CURRENT ASSETS
Other Equity 13,811.92 12,775.53
Property, Plant & Equipment 2,143.89 2,104.68
Equityattributable to owners 16,515.38 15,477.08
Right-of-use Assets 2,594.34 2,491.56
Non-controlling interests 117.56 232.13
Other Tangible Assets 56.43 40.88 TOTAL EQUITY 16,632.94 15,709.21
Goodwill & Other Intangibles 10,102.57 8,828.77 NON-CURRENT LIABILITIES
Borrowings NIL NIL
Other Non-Current Assets 1,392.58 1,500.08
Lease Liabilities 1,864.28 1,800.74
TOTAL NON-CURRENT 18,562.20 14,965.97
Other Non-Current Liabilities 3,827.99 1,233.02
CURRENT
ASSETS
TOTAL NON-CURRENT 5,692.27 3,033.76
Inventories 587.50 667.51 CURRENT
LIABILITIES
Borrowings 486.03 493.43
Cash and Cash Equivalents 6,287.97 7,235.42
Trade Payables 1,643.35 1,865.32
Trade Receivables 5,924.40 6,262.91
Lease Liabilities 508.88 467.14
Other Current Assets 2,643.68 2,091.19
Others 9,042.28 9,654.14
TOTAL CURRENT 15,443.55 16,257.03
TOTAL CURRENT 11,680.54 12,480.03
TOTAL ASSETS 34,005.75 31,223.00
TOTAL EQUITY AND LIABILITIES 34,005.75 31,223.00

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USD MN

Revenue Break-up (Quarterly)

Verticals* Q4FY23 Q3FY23 Q4FY22 Q-o-Q Y-o-Y
Passenger Cars 92.14 86.00 62.88 7.1% 46.5%
Commercial Vehicles 30.75 23.49 22.04 30.9% 39.5%
  • The balance revenues come from others, which is not a big area as of now
Business Units# Q4FY23 Q3FY23 Q4FY22 Q-o-Q Y-o-Y
Feature Development & Integration 76.21 71.53 60.80 6.5% 25.3%
Architecture & Middleware Consulting 23.83 18.07 9.79 31.9% 143.4%
Cloud Based Connected Services 23.75 20.85 16.52 13.9% 43.8%

- 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

Geography Q4FY23 Q3FY23 Q4FY22 Q-o-Q Y-o-Y
US 44.66 35.39 33.10 26.2% 34.9%
Europe 61.40 56.96 34.27 7.8% 79.2%
Asia 17.74 18.10 19.73 (2.0)% (10.1)%

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USD MN

Revenue Break-up (Annual)

Verticals FY23 FY22 Y-o-Y
Passenger Cars 314.39 242.40 29.7%
Commercial Vehicles 100.37 80.05 25.4%
Practices FY23 FY22 Y-o-Y
Feature Development & Integration 274.24 231.15 18.6%
Architecture & Middleware Consulting 66.77 38.35 74.1%
Cloud Based Connected Services 77.27 58.86 31.3%

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

Geography FY23 FY22 Y-o-Y
US 149.81 127.82 17.2%
Europe 195.36 131.89 48.1%
Asia 73.12 68.63 6.2%

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4/26/2023 23

P&L Metrics (Quarterly)

Q4FY23 Q3FY23 Q4FY22 Q-o-Q Y-o-Y
Revenue byContract Type
Time & Material Basis 54.6% 51.0% 48.1% 20.0% 61.3%
Fixed Price Basis 45.4% 49.0% 51.9% 3.9% 24.3%
Clients
Strategic Client Revenue 79.5% 81.4% 83.9% 9.5% 34.8%
Active Clients (Period End) 60 60
Revenue per Devp. Employee USD
48,092
45,105
45,679
R&D Expenditure (USD MN)
2.74
2.50
2.09
EBITDA Margin
19.1%
18.5%
18.6%
EBIT Margin
14.9%
14.1%
13.9%
PAT Margin
11.0%
11.0%
12.1%
Effective Tax Rate
18.1%
25.3%
17.1%
EPS(Basic)
4.13
3.72
2.92
EPS(Diluted)
4.09
3.68
2.89
R&D Expenditure (USD MN)
EBITDA Margin
EBIT Margin
PAT Margin
Effective Tax Rate
EPS(Basic)
EPS(Diluted)

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24

P&L Metrics (Annual)

FY23 FY22 Y-o-Y
Revenue by Contract Type
Time & Material Basis 52.6% 44.8% 49.6%
Fixed Price Basis 47.4% 55.2% 9.3%
Clients
Strategic T21 Client Revenue 82.5% 83.8% 25.4%
Active Clients (Period End) 60 60
Avg Revenue per Devp. Employee USD
43,929
48,804
R&D Expenditure (USD MN)
9.6
9.0
EBITDA Margin
18.9%
18.0%
EBIT Margin
14.5%
13.1%
PAT Margin
11.3%
11.3%
Effective Tax Rate
22.1%
19.8%
EPS (Basic)
14.10
10.17
EPS (Diluted)
13.96
10.05
R&D Expenditure (USD MN)
9.6
9.0
EBITDA Margin
18.9%
18.0%
EBIT Margin
14.5%
13.1%
PAT Margin
11.3%
11.3%
Effective Tax Rate
22.1%
19.8%
EPS (Basic)
14.10
10.17
EPS (Diluted)
13.96
10.05

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  • Excluding PP revenues

4/26/2023 25

Currency wise revenues, Hedging Details

Currency
wise
revenue
Q4FY23
Q3FY23
Q4FY22
FY23
FY22
USD
36.3%
35.0%
40.0%
38.4%
40.3%
EUR
42.8%
46.1%
32.2%
40.0%
33.9%
GBP
6.3%
5.6%
6.6%
6.5%
5.7%
JPY
8.8%
6.5%
12.4%
7.7%
11.1%
INR
4.1%
4.3%
5.9%
4.9%
5.0%
Others
1.8%
2.5%
2.9%
2.4%
4.0%
O/s Hedge Details Q4FY23
Hedge Rates
USD/INR 82.78
EUR/INR 88.74
GBP/INR 101.02
JPY/INR 0.64
Hedge Amounts(Mn)
USD/INR 47.55
EUR/INR 24.65
GBP/INR 6.00
JPY/INR 2,469.00

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26

Headcount Data

Period End Headcount Q4FY23 Q3FY23 Q4FY22 Q-o-Q Y-o-Y
Development 10,297 9,795 7,628 - -
Enabling & Sales 716 695 617 - -
Total 11,013 10,490 8,245 - -

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  • 1 March 2021

Contact Us

Reimagining Mobility withYOU

Conference Call Details

Conference name : KPIT Technologies Q4 FY2023 Post Earnings Conference Call Date : Thursday April 27, 2023 Time : 1700 Hrs. Participants : Mr. S.B.(Ravi) Pandit, Co-founder & Chairman Mr. Kishor Patil, Co-founder, CEO & MD Mr. Sachin Tikekar, President, Joint MD Mr. Anup Sable, Whole-time Director & CTO Mr. Chinmay Pandit, Whole-time Director & Head Americas Mrs. Priya Hardikar, CFO Mr. Sunil Phansalkar, Head-IR

: +91 22 6280 1116 Primary number Dial-in Numbers for all : +91 22 7115 8017 Local Access - - participants Click here for your : USA 1 866 746 2133 | UK 0 808 101 1573 International Numbers Diamond Pass - Singapore 800 101 2045 - Hongkong 800 964 448

About KPIT Technologies

KPIT (BSE: 542651; NSE: KPITTECH), KPIT is a global technology company with software solutions that will help mobility leapfrog towards autonomous, clean, smart and connected future. With 9,000+ Automobelievers across the globe, specializing in embedded software, AI & Digital solutions, KPIT enables clients accelerate implementation of next generation mobility technologies. With development centers in Europe, USA, Japan, China, – Thailand and India KPIT works with leaders in mobility and is present where the ecosystem is transforming. 25 For more information, visit http://www.kpit.com

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Contact

For Investor Queries

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Email [email protected]

Desk Phone

  • 91 20 6770 6997

Cell + 91 98509 66011

Website www.kpit.com

Sunil Phansalkar

30

Contact

For Media Queries

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Email [email protected]

Desk Phone + 91 80 6606 6000 (7865)

Cell + 91 99001 50180

Website www.kpit.com

Sunil B R

31

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THANK YOU !!

KPIT Technologies Ltd.

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