KPIT Technologies Ltd — Interim / Quarterly Report 2021

Apr 28, 2021

KP 11·

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•

April 28, 2021

BSE Limited

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001.

Scrip ID: KPITTECH Scrip Code: 542651

Kind Attn: The Manager, Department of Corporate Services

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

Symbol: KPITTECH Series: EQ

Kind Attn: The Manager, Listing Department

Subject: Investor Update - Q4 FY 2021.

Dear Sir I Madam,

Please find enclosed the investor Update - Q4 FY 2021.

Kindly take the same on your records.

Thanking you.

Yours faithfully,

Encl: - As mentioned above.

KPIT Technologies Limited

0 +91 20 6770 6000 E info@kpit.com W kpit.com

Registered & Corporate Office: Plot No. 17, Rajiv Gandhi lnfotech Park, MIDC-SEZ, Phase-Ill, Maan, Taluka-Mulshi, Hinjawadi, Pune-411057, India. CIN: L74999PN2018PLC174192

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April 28, 2021 Investor Update Q4FY21

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KPIT Technologies Ltd.

1

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

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Performance Overview

• Q4FY21

3

Q4FY21 Performance Overview

KPIT Q4FY21 USD Revenue grows 6.8% sequentially Net Profit growth of 11.9% sequentially

1

Q4FY21 EBITDA at 17.2% as compared to 15.7% last quarter.

2

Net Profit for the quarter at ₹ 467.5 million as against ₹ 418 million last quarter

3

Q4FY21 reported revenue at USD 74.48 million, a CC growth of 5.1% Q-o-Q

4

Net Cash as at the quarter end stood at ₹ 8,224 Million as compared to ₹ 6,295 last quarter, ZERO DEBT

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Q4FY21 Performance Highlights

Sequential growth of 6.8% led by Connected Vehicles 01 and Autonomous Driving. Full fledged execution started on all large engagements won earlier.

Operating Margin (EBITDA) expansion of 150 bps despite 02 rupee appreciation. Improvement in utilization, offshore revenues and revenue growth helped expand margins

Sequential net profit growth of ~12% despite higher forex 03 conversion loss due to rupee appreciation. Lower depreciation and higher yields on cash during the quarter

High cash conversion continues with DSO at 54 days. 9[th] 04 consecutive quarter of increase in net cash

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Additional facts - timeseries

Revenue $ M

71.1 72.8[77.2][76.9][76.9] 69.7 74.5 65.3 65.3

Qtr End Net Cash ₹ M

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8,224
[6,295]
[5,278]
[3,939]
[3,278]
1,810 [2,041] [2,584]
900
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EBITDA %

[15.7% 17.2%] 12.8%[14.6%][13.4%][13.4% 13.5% 13.4%][ 14.3%]

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EBITDA ₹ M
931
811
739 727 737 751 697
639 662
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Management Quotes

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Commenting on the performance of FY21, Ravi Pandit, Co-founder and Chairman, KPIT said,” FY21 was a challenging year in many ways and I am happy on the way we have emerged stronger. The mobility industry is embracing new with arms and KPIT is to be at the engineering technologies open proud forefront of these adaptions. KPIT’s leading positioning in this technology-led transformation gives us good business visibility over the next 4-5 years”.

Kishor Patil, Co-founder, CEO and MD, KPIT said,” We have delivered consecutive quarters of good growth and margin expansion. KPIT teams, have done an on these numbers. We are globally, exceptional job delivering assertive of the growth trajectory and feel fairly confident of delivering double in FY22. We continue to focus on digit growth people development, operational efficiency and productivity improvement”.

Sachin Tikekar, President and Whole-time Director, KPIT said, ” During the year our focus was on commitments to our clients and our upholding keeping employees safe. We continue to deepen our strategic client engagements and focus on further enhancing our practices with relevant technology investments to make our clients successful in their technology roadmaps. Longer strategic client engagements give us good growth visibility for the medium term”.

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Cash Flow – Major Movement

INR Million Decrease in Working Capital – 1,135

Capex – 40 Term Loan Repayment - 188

Cash and Cash Equivalents break-up	₹ M
In Investment Accounts (in India)	4,059
In Investment Accounts (outside India)	2,865
In Operating Accounts	1,300
TOTAL	8,224

		Q-o-Q Increase	Q-o-Q Increase	in Net
		Cash : INR 1,929		Million
	NET CASH (INR Mln)		Q4FY21	Q3FY21
	Gross Cash		8,224	6,478
	Long Term Debt		NIL	183
	Short Term Debt		NIL	NIL
	NET CASH		8,224	6,295

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Cash and Dividend Policy

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DIVIDEND POLICY

We have revised our dividend policy detailing our thought process on dividend.

We intend to improve our payout ratio to 35% in the next 2-3 years

FY21 PROPOSED DIVIDEND

In line with our revised Dividend Policy the proposed dividend payout for FY21 stands at 29.5% FY21 Proposed Dividend is ₹ 1.50/share as against ₹ 1.00 /share in FY20

CASH UTILIZATION

In addition to the intent to improve dividend payout consistently going forward, we will look for niche, bolt-on, technology led acquisitions to bolster our technology prowess in relevant practices

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Sturdy Balance Sheet

69%

NET CASH

16%

Fixed assets (Land, Building, Plant & Property, Furniture)

Net Worth Net Worth ₹ 11,989.81 million Represented by 31 March 2021 13% 2% Net Operational Assets Software (Debtors + oth. current assets + (Third Party oth. non-current assets – current Software Licences) and non-current liabilities)

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New Engagements

T25 Engagements, broad based across geographies

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A leading Asian Car Manufacturer selected KPIT for a couple of programs in the Connected domain

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A leading Asian Car Manufacturer selected KPIT for multiple programs in the Autonomous Driving domain

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A leading European Commercial Vehicle Manufacturer selected KPIT for a program in the Vehicle Diagnostics area

A leading American Car Manufacturer selected KPIT for a program in the Autonomous area Driving

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A leading American Tier I selected KPIT for a program in the Powertrain domain

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The financial year – positive exit

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Q4FY21
vs
Q4FY20
74.5
USD reported
vs
revenue ($ M)
76.9
Revenue in terms of
volume
17.2%
EBITDA Margins vs
13.5%
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Q4FY21
vs
Q4FY20
931
Absolute EBITDA (₹ M) vs
751
468
Reported PAT (₹ M) vs
371
8,224
Net Cash (₹ M) vs
3,278
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Thus, as stated earlier, we have exited FY21 with Q4FY21 having a higher EBITDA margin, higher absolute EBITDA, higher reported PAT and higher net cash as compared Q4FY20

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FY22 – Focus Areas

PLATFORMS AND PRACTICES

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We will invest in the and new relevant to our right practices technologies strategic clients to further differentiate KPIT as a Software Integration Partner

ZERO DEFECT DELIVERY

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Our processes are aligned to ensure first time right delivery to our clients. Focus on Engineering Productivity improvement.

BEST PLACE TO GROW

FY21 had low attrition, we expect the same to go up in H1 and stabilize in H2 in FY22. We continue to invest in net talent creation, individual career development, top talent retention & overall employee well being

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T25 Clients

We will continue to deepen our Client Engagements and improve on the overall Client Engagement Framework

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FY22 – Revenue and Profitability

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REVENUE GROWTH
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The revenue growth momentum will continue in FY22. The growth is expected to be broad based across practices and clients. We have a healthy order book and decent medium-term visibility, giving us confidence of double-digit growth in FY22

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PROFITABILITY
Platforms
Zero
and
Defect
Practices
Delivery
fresher additions, higher
operating costs & front-
Profitability
end investments.
FY22
Best Place
Offshoring, productivity
to Grow
improvement, employee
pyramid and fixed cost
Revenue leverage will help us
Growth T25 neutralize & better cost
Clients increases. We expect
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FY22 will see wage hikes, impact of new wage bill, fresher additions, higher operating costs & frontend investments. Offshoring, productivity improvement, employee pyramid and fixed cost leverage will help us neutralize & better cost increases. We expect FY22 EBITDA to be in the 16%-17% range.

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2 years since the merger - demerger

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Shareholder Value Creation – Post Merger-Demerger

Returns Since the announcement of merger-demerger

Returns Since the effective date of merger-demerger

Avg. 3-month Stock Price of Erstwhile KPIT before announcement of merger-demerger	₹ 110
Announcement Date	29/01/2018
Current Prices:
KPIT	195
Birlasoft	250
Total	445
Absolute Return	304%
CAGR	54%

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Stock Price of Erstwhile KPIT on the Effective Date of merger- demerger	₹ 206
Announcement Date	15/01/2019
Current Prices:
KPIT	195
Birlasoft	250
Total	445
Absolute Return	116%
CAGR	40%

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Other

Updates

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Other Updates – KPIT Sparkle

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Mar 2021
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KPIT Sparkle’s 7th edition goes all virtual in 2021

KPIT Sparkle’s is one of India’s biggest innovation platforms for students, faculties, colleges, and universities

• 21,000+ student registrations

• 1,000 colleges in 27 Indian states

• 2,700+ projects

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Team Nano-Fluid from ICARNational Dairy Research Institute, Bengaluru, won the Platinum award of ₹ 10,00,000

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Other Updates

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Jan 2021
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Mr. Anup Sable shared his perspectives with TechGig on emerging tech trends of 2021

The feature is titled 'Trends that will dominate 2021 in automotive and mobility ecosystem' and it focuses on the developments in the areas of Digital Cockpit, Autonomous Driving and the Electric Powertrain on TechGig is a platform exclusively for technology professionals .

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Feb 2021
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Dr. Manaswini Rath VP and Global Head, AD, KPIT panelist at London & Partners and NASSCOM

The Role of Data in the Mobility CASE - India & UK Perspective - The discussion focused on priorities and opportunities in the Connected – Autonomous – Shared – Electric (CASE) in both the UK and India. The event was aimed at Startups and Scaleups that are interested in learning more about CASE and exploring opportunities in new markets.

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Feb 2021
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Nitin Swamy, KPIT Panelist at Udyog Manthan webinar

Nitin Swamy, Senior Solution Architect, KPIT was a key speaker-panelist for a webinar on ‘Robotics for Skill Training in India' organized by Udyog Manthan

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Financial and Operational Data

• Snapshot

20

INR MN

Profit & Loss Account Snapshot

	DETAILS Q4FY21 Q3FY21 Q4FY20 FY21 FY20	DETAILS Q4FY21 Q3FY21 Q4FY20 FY21 FY20	DETAILS Q4FY21 Q3FY21 Q4FY20 FY21 FY20	DETAILS Q4FY21 Q3FY21 Q4FY20 FY21 FY20	DETAILS Q4FY21 Q3FY21 Q4FY20 FY21 FY20
	Revenue from Operations 5,403.27 5,172.45 5,562.28 20,357.41 21,561.69
	Other Income 51.53 64.09 76.79 139.29 283.17
	Total Income 5,454.80 5,236.54 5,639.07 20,496.70 21,844.86
	Operating Expenses	4,527.68		4,343.13	4,810.91 17,286.02 18,608.08
	EBITDA 930.96 810.57 751.37 3,100.74 2,953.61
	Depreciation 309.09 337.72 293.95 1,331.74 1,080.48
	EBIT 621.87 472.85 457.42 1,769.00 1,873.13
	Finance Costs 39.69 39.83 44.96 172.53 198.20
	Change in FMV of Investments 11.56 2.88 47.43 18.33 (56.92)
	Profit Before Exceptional Items 589.90 518.74 536.68 1,724.74 1,901.18
	Exceptional items - 19.45 (64.15) 51.49 (95.09)
	PBT 589.90 538.19 472.53 1,776.23 1,806.09
	Tax 119.45 108.45 91.53 362.26 338.34
	PAT 470.45 429.74 381.00 1,413.97 1,467.75
	Profit Attributable to owners of company 467.53 417.73 371.36 1,404.31 1,465.90
	Profit Attributable to non-controlling interest 2.92 12.01 9.64 9.66 1.85
	21 This includes forex loss of INR 55.37 Million (Published Results Note 4) which is excluded in EBITDA computation This includes forex gain of INR 18.75 Million which is excluded in EBITDA computation

INR MN

Balance Sheet Snapshot

ASSETS	Q4FY21	Q3FY21
NON-CURRENT ASSETS
Property, Plant & Equipment	1,968.11	2,032.29
Right-of-use Assets	2,505.07	2,614.33
Other Tangible Assets	117.90	112.08
Goodwill & Other Intangibles	1,298.75	1,430.26
Other Non-Current Assets	758.84	804.15
TOTAL NON-CURRENT	6,648.67	6,993.11
CURRENT ASSETS
Inventories	NIL	6.78
Cash and Cash Equivalents	8,224.57	6,478.61
Trade Receivables	3,083.47	4,291.94
Other Current Assets	1,663.49	1,570.31
TOTAL CURRENT	12,971.53	12,347.64
TOTAL ASSETS	19,620.20	19,340.75

EQUITY & LIABILITIES		Q4FY21	Q3FY21
EquityShare Capital		2,690.44	2,689.86
Other Equity		9,299.37	8,788.43
Equityattributable to owners		11,989.81	11,478.29
Non-controllinginterests		28.74	26.97
TOTAL EQUITY		12,018.55	11,505.26
NON-CURRENT LIABILITIES
Borrowings		NIL	NIL
Lease Liabilities		1,900.56	2,026.95
Other Non-Current Liabilities		401.00	74.93
TOTAL NON-CURRENT		2,301.56	2,101.88
CURRENT LIABILITIES
Borrowings		NIL	182.51
Trade Payables		1,352.42	1,113.1
Lease Liabilities		367.86	345.02
Others		3,579.81	4,092.98
TOTAL CURRENT		5,300.09	5,733.61
TOTAL EQUITY AND LIABILITIES		19,620.20	19,340.75

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USD MN

Revenue Break-up (Quarterly)

	Geography	Q4FY21	Q3FY21	Q3FY21	Q4FY20	Q4FY20	Q-o-Q	Y-o-Y
	US	31.34	28.57		30.41		9.7%	3.1%
	Europe	29.77	30.48		31.91		(2.3)%	(6.7)%
	Asia	13.38	10.68		14.62		25.3%	(8.5)%
	TOTAL	74.48	69.72		76.94		6.8%	(3.2)%
	Practices Powertrain AD-ADAS Connected Vehicle Others	Q4FY21		Q3FY21		Q4FY20	Q-o-Q	Y-o-Y 20.4% (30.5)% (1.0)% (5.9)%
		30.12		30.00		25.01	0.4%	20.4%
		13.80		13.34		19.87	3.4%	(30.5)%
		7.99		6.76		8.07	18.1%	(1.0)%
		22.58		19.62		23.99	15.1%	(5.9)%

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USD MN

Revenue Break-up (Annual)

	Geography	FY21	FY20	Y-o-Y	Y-o-Y
	US	114.66	125.62	(8.7)%
	Europe	112.66	117.91	(4.5)%
	Asia	47.46	60.28	(21.3)%
	TOTAL	274.77	303.81	(9.6)%
	Practices	FY21	FY20	Y-o-Y 4.3% (17.0)% (21.9)% (14.4%)
	Powertrain	108.22	103.78	4.3%
	AD-ADAS	57.89	69.73	(17.0)%
	Connected Vehicle	30.31	38.81	(21.9)%
	Others	78.36	91.49	(14.4%)

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P&L Metrics (Quarterly)

	Q4FY21	Q3FY21	Q4FY20	Q-o-Q	Y-o-Y
Revenue by Contract Type
Time & Material Basis	45.4%	46.3%	48.6%	4.8%	(9.6)%
Fixed Price Basis	54.6%	53.7%	51.4%	8.6%	2.9%
Clients
Strategic T21 Client Revenue	85.64%	85.27%	81.81%	7.3%	1.3%
Active Clients	55	55	58
Revenue per Devp. Employee USD 50,946 49,456 46,675
EBITDA Margin	17.2% 15.7% 13.5%
EBIT Margin	11.5% 9.1% 8.2%
PAT Margin	8.7% 8.1% 6.7%
Effective Tax Rate	20.2% 20.2% 19.4%
EPS (Basic)	1.74 1.55 1.38
EPS (Diluted)	1.72 1.54 1.38

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

P&L Metrics (Annual)

	FY21	FY20	Y-o-Y	Y-o-Y
Revenue by Contract Type
Time & Material Basis	47.9%	49.3%	(12.2)%
Fixed Price Basis	52.1%	50.7%	(7.0)%
Clients
Strategic T25 Client Revenue	85.69%	81.45%	(4.9)%
Active Clients	55	58
Avg Revenue per Devp. Employee USD 46,099.6 45,825.18
EBITDA Margin 15.2% 13.7% EBIT Margin 8.7% 8.7% PAT Margin 6.9% 6.8% Effective Tax Rate 20.4% 18.7% EPS (Basic) 5.22 5.46 EPS (Diluted) 5.19 5.44

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• 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	Q4FY21	Q3FY21	Q4FY20	FY21	FY20
USD	43.5%	42.0%	41.2%	43.1%	42.5%
EUR	33.9%	38.6%	32.7%	35.5%	30.9%
GBP	5.2%	4.5%	8.1%	4.6%	7.4%
JPY	8.9%	5.3%	9.6%	7.9%	10.8%
INR	4.6%	5.0%	5.9%	5.2%	5.6%
Others	3.8%	4.5%	2.7%	3.7%	2.8%
Realized Rate Q4FY21 Q3FY21 Q4FY20 INR/USD 72.55 74.19 72.29
Realized Rate Q4FY21 Q3FY21 Q4FY20
INR/USD 72.55 74.19 72.29

O/s Hedge Details	Q4FY21
Hedge Rates
USD/INR	75.43
EUR/INR	91.93
GBP/INR	103.26
Hedge Amounts(Mn)
USD/INR	23.05
EUR/INR	11.15
GBP/INR	6.10

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Headcount Data

Period End Headcount	Q4FY21	Q3FY21	Q4FY20	Q-o-Q	Y-o-Y
Development	5,848	5,639	6,594	-	-
Enabling & Sales	518	513	531	-	-
Total	6,366	6,152	7,125	-	-

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Contact us

• Contact

29

Conference Call Details

Conference name : KPIT Technologies Q4 FY2021 Post Earnings Conference Call Date : Thursday April 29, 2021 Time : 1600 Hrs. Participants : Mr. S.B. (Ravi) Pandit, Co-Founder, Chairman 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 6,250+ 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. 30 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

4/28/2023 1

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

4/28/202132

Thank You

4/28/2021

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