KPIT Technologies Ltd — Interim / Quarterly Report 2021

Oct 21, 2020

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October 21, 2020

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 – Q2 FY 2021.

Dear Sir / Madam,

Please find enclosed the investor Update – Q2 FY 2021.

Kindly take the same on your records.

Thanking you. Yours faithfully,

For KPIT Technologies Limited (Formerly KPIT Engineering Limited)

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Nida Deshpande

Company Secretary & Compliance Officer

Encl.: - As mentioned above.

O +91 20 6770 6000 E info@kpit.com W kpit.com

KPIT Technologies Limited (Formerly KPIT Engineering Limited) Registered & Corporate Office: Plot No. 17, Rajiv Gandhi Infotech Park, MIDC-SEZ, Phase-III, Maan, Taluka-Mulshi, Hinjawadi, Pune-411057, India. CIN: L74999PN2018PLC174192

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October 21, 2020 Investor Update Q2FY21

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KPIT Technologies Ltd.

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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 customers 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

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Performance Overview

• Q2FY21

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Q2FY21 Performance Overview

KPIT Q2FY21 Net Profit rises 16.1% Q-o-Q, EBITDA at 14.3% as compared to 13.4% last quarter

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Net Profit for the quarter stood at ₹ 279 million as compared to ₹ 240 million last quarter

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Net Cash as at the quarter end stood at ₹ 5,278 Million as compared to ₹ 3,278 at the beginning of the year

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Q2FY21 reported revenue at USD 65.32, flattish over Q1FY21. Change in revenue mix, lower onsite, reflect volume growth.

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Additional facts - timeseries

Qtr End Net Cash ₹ M

5,278

[3,939]

[3,278]

[2,584] 1,810[2,041] 900

Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21

Revenue $ M

71.05[72.75][77.23][76.88][76.94] 65.25 65.32

Qtr End DSO 87 82 72 67 64 66 59

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EBITDA %

14.6% 13.4% 13.4%[13.5%] 13.4% 12.8%

14.3%

Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21

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Management Quotes

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Kishor Patil, Co-founder, CEO and MD, KPIT said,” The revenue for the quarter was in line with our and we delivered better on expectation profitability. Change in revenue mix helped us grow volumes and we expect offshoring to increase for a couple of quarters. Despite rupee appreciation, we increased operating margins on the back of improved operational efficiency and productivity. We are confident of growth and further margin improvement in H2 over H1”.

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Sachin Tikekar, President and Whole-time Director, KPIT said, ” Our clients are witnessing a steady build up in their operations and we persist to drive zero defect delivery and uphold our commitments to them. We continue to invest in relevant practices aligned to CASE (Connected, Autonomous, Shared, Electric). Our pipeline remains strong with a few strategic deals, reiterating our position as a software integrator partner to our clients.”.

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Cash Flow – Major Movement

INR Million Decrease in Working Capital – 957 Capex – 221 Loans repaid – 196

Cash and Cash Equivalents break-up	₹ M
In Investment Accounts (in India)	2,021
In Investment Accounts (outside India)	1,705
In Operating Accounts	1,736
TOTAL	5,462

		Q-o-Q Increase	Q-o-Q Increase	in Net
		Cash : INR 1,339		Million
	NET CASH (INR Mln)		Q2FY21	Q1FY21
	Gross Cash		5,462	4,319
	Long Term Debt		184	380
	Short Term Debt		NIL	NIL
	NET CASH		5,278	3,939

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FCF = Cash Flow from Operations minus capex

Improvement in Operations – Q2FY21

Change in revenue mix Onsite to offshore movement enabled volume growth, albeit reduction in billed revenue

Reduction in Onsite Cost R eduction in onsite revenues led to proportionately lower salary and sub-contracting costs

1 2 3 4

Improved Operating Margins Better Cash Conversion

Consolidation of offices Consolidation of a couple of offices, proportionately lower operational costs

Improvement in DSO Extended credit period for a couple of customers got over, rigor in collections

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H1 Goals and progress

H1 Goals as set end FY20 (Q4FY20 Investor Update)

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Conserve Cash, Improve Liquidity We started the year at a Net Cash Balance of ₹ 3,278 Million and are at ₹ 5,278 Million at the end of H1 FY21

Increase share of Wallet in Strategic Accounts We have been able to increase the share of wallet in several of our strategic accounts and maintained the same in some, despite pandemic challenges

Delivery and Operational Excellence Consistent focus on operational excellence helped us improve operational efficiency, margins and productivity

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H2FY21 - The way forward

Revenue Growth Increase in Offshore Lower Depreciation Improvement in EBITDA & PAT Margins

Revenue Growth Increase in Offshore Salary Restoration Lower Depreciation EBITDA @ 14%+ Q4 Q3

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Deal Wins

All OEM Deals, broad based across geographies

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A leading American Car Manufacturer selected KPIT for a program in the autonomous area driving

A leading American Car Manufacturer selected KPIT for a program in the connected domain

A leading German Car Manufacturer selected KPIT for a program in the electric area powertrain

A leading European Car Manufacturer selected KPIT for a program in the invehicle area networking

A leading Asian Car Manufacturer selected KPIT for a program in the connected domain

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Updates

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Thought Leadership Updates

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Mr. Ravi Pandit accepted the Chairmanship of Research Council, Central Electronics Engineering Research Institute (CEERI)

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CEERI is based in Pilani. Council of Scientific and Industrial Research (CSIR) is India’s highest body for Scientific and Industrial Research. CSIR employs over 4,600 scientists, runs 41 labs & 80 field centers. With a view to make these labs directly connected with industry, they have Research Councils.

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KPIT contributes as a technology partner to develop India's first indigenous Hydrogen Fuel Cell technology for vehicles in partnership with CSIR

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KPIT, in partnership with CSIR, successfully ran trials of India's first indigenously developed Hydrogen Fuel Cell prototype. Being a Technology company, KPIT will act as a technology and innovation partner and will partner with its clients to bring this technology on the road.

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Other Updates

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Mr. Kishor Patil interviewed by Autocar Professional

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Mr. Kishor Patil was interviewed by Mr. Sumantra B Barooah, Executive Editor, Autocar Professional. Kishor spoke about KPIT and its focus on Autonomous Driving, Vehicle Electrification and Connected Vehicles. He also spoke about the trends in electrification & types of autonomous vehicle technologies suitable for India

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KPIT wins 18th FICCI CSR Award under Exemplary Innovation for KPIT Sparkle

FICCI Corporate Social Responsibility Awards – India’s first CSR award was instituted in 1999 by FICCI. KPIT was awarded under Category 7- Exemplary Innovation (irrespective of the turnover of the company) for its annual flagship initiative KPIT Sparkle

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Financial and Operational Data

• Snapshot

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INR MN

Profit & Loss Account Snapshot

	DETAILS Q2FY21 Q1FY21 Q2FY20	DETAILS Q2FY21 Q1FY21 Q2FY20
	Revenue from Operations 4,854.59 4,927.10 5,440.98
	Other Income 24.52 25.17 90.03
	Total Income 4,879.11 4,952.27 5,531.01
	Operating Expenses 4,158.04 4,283.19 4,714.31
	EBITDA 696.55 662.37 726.67
	Depreciation 354.90 330.03 265.08
	EBIT 341.65 332.34 461.59
	Finance Costs 43.70 49.31 59.31
	Change in FMV of Investments 0.68 3.21 (63.53)
	Profit Before Exceptional Items 323.15 292.95 428.78
	Exceptional items 32.04 - 24.92
	PBT 355.19 292.95 453.70
	Tax 83.66 50.70 86.40
	PAT 271.53 242.25 367.30
	Profit Attributable to owners of company 278.88 240.17 359.12
	Profit Attributable to non-controlling interest (7.35) 2.08 8.18

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INR MN

Balance Sheet Snapshot

ASSETS	Q2FY21	Q1FY21
NON-CURRENT ASSETS
Property, Plant & Equipment	2,086.65	2,095.86
Right-of-use Assets	2,668.92	2,977.66
Other Tangible Assets	78.82	83.28
Goodwill & Other Intangibles	1,508.28	1,652.68
Other Non-Current Assets	860.98	987.39
TOTAL NON-CURRENT	7,203.65	7,796.87
CURRENT ASSETS
Inventories	45.05	76.25
Cash and Cash Equivalents	5,462.39	4,318.57
Trade Receivables	3,207.61	4,345.75
Other Current Assets	1,784.94	1,969.97
TOTAL CURRENT	10,499.99	10,710.54
TOTAL ASSETS	17,703.64	18,507.41

EQUITY & LIABILITIES		Q2FY21	Q1FY21
EquityShare Capital		2,689.63	2,689.02
Other Equity		8,275.81	7,930.92
Equityattributable to owners		10,965.44	10,619.94
Non-controllinginterests		13.92	21.03
TOTAL EQUITY		10,979.36	10,640.97
NON-CURRENT LIABILITIES
Borrowings		NIL	NIL
Lease Liabilities		2,022.30	2,356.68
Other Non-Current Liabilities		97.63	159.76
TOTAL NON-CURRENT		2,119.93	2,516.44
CURRENT LIABILITIES
Borrowings		184.20	380.08
Trade Payables		958.38	902.14
Lease Liabilities		403.36	461.45
Others		3,058.41	3,606.33
TOTAL CURRENT		4,604.35	5,350.0
TOTAL EQUITY AND LIABILITIES		17,703.64	18,507.41

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USD MN

Revenue Break-up

	Geography	Q2FY21	Q1FY21	Q2FY20	Q-o-Q	Y-o-Y	Y-o-Y
	US	27.30	27.45	34.19	(0.6)%	(20.1)%
	Europe	26.67	25.74	27.55	3.6%	(3.2)%
	Asia	11.34	12.06	15.49	(5.9)%	(26.8)%
	TOTAL	65.32	65.25	77.23	0.1%	(15.4)%
	Verticals	Q2FY21	Q1FY21	Q2FY20	Q-o-Q	Y-o-Y
	Passenger Cars	50.63	50.76	58.58	(0.3)%	(13.6)%
	Commercial Vehicles	14.05	13.55	17.16	3.7%	(18.1)%
	New Mobility	0.33	0.61	0.78	(45.1)%	(57.5)%
	Others	0.31	0.33	0.71	(8.9)%	(56.9)%
	TOTAL	65.32	65.25	77.23	0.1%	(15.4)%
	Practices	Q2FY21	Q1FY20	Q2FY20	Q-o-Q	Y-o-Y
	Powertrain	24.18	23.92	28.64	1.1%	(15.6)%
	AD-ADAS	16.38	14.37	15.29	14.0%	7.1%
	Connected Vehicle	7.32	8.24	9.88	(11.1)%	(25.9)%
	Others	17.44	18.72	23.42	(6.8)%	(25.5)%

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P&L Metrics

	Q2FY21	Q1FY21	Q2FY20	Q-o-Q	Y-o-Y
Revenue by Contract Type
Time & Material Basis	52.0%	48.2%	54.4%	7.9%	(19.1)%
Fixed Price Basis	48.0%	51.8%	45.6%	(7.2)%	(11.0)%
Customers
Strategic Customer Revenue (T21)*	86.1%	86.0%	82.8%	0.2%	(12.06)%
Active Customers	55	55	55
			45,647 13.4% 8.5% 6.6% 19.0% 1.34 1.33
Revenue per Devp. Employee USD 42,602 41,394
EBITDA Margin	14.3% 13.4%
EBIT Margin	7.0% 6.7%
PAT Margin	5.7% 4.9%
Effective Tax Rate	23.6% 17.3%
EPS (Basic)	1.04 0.89
EPS (Diluted)	1.03 0.89

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10/21/2020

• Out of the target 25, strategic relationships with 21 accounts established and hence revenue for those accounts considered

Currency wise revenues, Hedging Details

Currency wise revenue	Q2FY21	Q1FY21	Q2FY20
USD	43.9%	43.1%	45.8%
EUR	34.5%	34.8%	28.1%
GBP	4.5%	4.2%	7.3%
JPY	8.0%	9.4%	11.0%
INR	5.8%	5.3%	5.1%
Others	3.4%	3.2%	2.9%
Realized Rate Q2FY21 Q1FY21 Q2FY20
INR/USD 74.32 75.51 70.45

Hedge Details	Q2FY21
Hedge Rates
USD/INR	76.01
EUR/INR	87.36
GBP/INR	96.53
Hedge Amounts(Mn)
USD/INR	16.55
EUR/INR	5.60
GBP/INR	3.00

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Headcount Data

Period End Headcount	Q2FY21	Q1FY21	Q2FY20	Q-o-Q	Y-o-Y
Development	6,133	6,305	6,768	-	-
Enabling & Sales	497	501	527	-	-
Total	6,630	6,806	7,295	-	-

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10/21/2020

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Contact us

• Contact

22

Conference Call Details

Conference name : KPIT Technologies Q2 FY2021 Post Earnings Conference Call Date : Thursday October 22, 2020 Time : 1600 Hrs. Participants : Mr. Kishor Patil, Co-founder, CEO & MD Mr. Sachin Tikekar, President & Board Member Mrs. Priya Hardikar, SVP & Head of Finance Mr. Sunil Phansalkar, Head-IR Dial-in Numbers for all participants

Primary number : +91 22 6280 1116 Local Access : +91 22 7115 8017 International Numbers : USA - 1 866 746 2133 | UK - 0 808 101 1573 | 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 6,000+ Automobelievers across the globe, specializing in embedded software, AI & Digital solutions, KPIT enables customers 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. 23 For more information, visit http://www.kpit.com

Contact

For Investor Queries

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Email Sunil.Phansalkar@kpit.com

Desk Phone + 91 20 6770 6997

Cell + 91 98509 66011

Website www.kpit.com

Sunil Phansalkar

10/21/20 2 04

Contact

For Media Queries

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Email Sunil.R@kpit.com

Desk Phone + 91 80 6606 6000 (7865)

Cell + 91 99001 50180

Website www.kpit.com

Sunil B R

10/21/20 2 05

Thank You

10/21/2020

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