KPIT Technologies Q1 FY26 results (Apr–Jun 2025) and concall

Yes. I mean what we see in the newspapers and overall, what you know and what we talk to government and understanding and of course, the clients. I believe in a quarter or so, I think there will be more certainty.

Addresses macro uncertainty and potential timeline for improvement in client spending confidence.

Asked by Bhavik Mehta

I think in quarter 1 as well as quarter 2, the way we see is that if you remember, last year, we had some onetime income, which I mentioned also at the end of the year last time and during the opening remarks here. Many of that income had gone, but I think it has been compensated by the new wins or some of the start of the projects. So already, we see some of that. but I think we have not ramped up to our expectation in quarter 1 and quarter 2, but we do believe that in H2, sometime in the H2, it will start growing.

Clarifies that Q1/Q2 are still below expectations but H2 is expected to grow, linking to previous one-time income and new project starts.

Asked by Karan Uppal

In terms of the spend, obviously, there is a lot of prioritization, reprioritization that's been done given the cost pressures that are being faced by all the OEMs across the globe. The basic thinking is they're making investments in the features that make sense and that they have to bring into production immediately in order to remain competitive. And there are two specifics. I think it's becoming a default that everybody has a smart cockpit or an e-cockpit. And secondly, it has Level 2+ autonomy.

Explains the shift in OEM spending priorities towards essential features like smart cockpits and L2+ autonomy, impacting deal scope and growth.

Asked by Nitin Padmanabhan

Absolutely. I'll give one example. And I think, see, take an example of we doing a validation earlier. So right now, as Mr. Tikekar mentioned, it is an area where most of the project programs are in the process of validation, right? That's what is happening. Now the many OEMs are realizing that they are delayed and they have to catch up very quickly and have a better validation with a better quality but much quicker. Now for that, we have brought in a very good solution in terms of a Al driven validation. Now this is a big priority for the OEM, so they have given us reasonably reasonable size orders, prioritizing over other spend. And we have won such kind of deals, but in that case, because they are not in a position to increase their spend, they had to slow down or cut down spend somewhere else, and that has also impacted us.

Provides a concrete example of how AI-driven solutions, while winning new business, can lead to cannibalization of existing services or other client spends due to budget constraints.

Asked by Nitin Padmanabhan

We don't like to comment on more details on the client project. But I may say that this is specific to India program. And a lot of work we will be bringing in what assets we have, and we will be adapting it more for India market-This will be about 3 years kind of a program. And this is much like the other programs we undertake, and I cannot talk about the numbers on this specific program.

Confirms the JSW deal is an India-specific, 3-year program, highlighting strategic focus on the Indian market without disclosing financial specifics.

Asked by Aman Soni

Yes. So we are in that process, we had certain, I would say, condition precedent CPs, which are still not fulfilled. So, we are waiting for that. We do hope in this quarter, it should happen. It's not happening on the 1st of July, that I can tell you. So, we'll see, and we'll keep you informed as and when it happens, of course.

Provides an update on the pending Caresoft acquisition, indicating it's delayed but expected to close this quarter, which is important for China market strategy.

Asked by Chandramouli Muthiah

Yes. so I'll answer this in 2, 3 ways. One is, of course, our growth has been flattish for the last few quarters and maybe we are expecting another 1 quarter of growth in that range. So, looking at that, of course, we manage our head count based on how we see the next quarters, right? And based on that, what we have done is if you look at for last year, our attrition is around 7% or so on an annual basis. At that range, we have not added, filled the bench as we generally would do. So that's where we are. And naturally, we have continued to hire freshers.

Explains the headcount reduction as a response to flattish growth and managed attrition, with continued hiring of freshers focused on new skills.

Asked by Chandramouli Muthiah

Yes. So we are going to do that in a different way. Basically, as we talked about. that our business model and client expectations are changing. So, we are looking at all of our HR processes, including hiring, training, appraisals and compensation. And we have also done the complete benchmarking with the new set of talent, which we will compete henceforth not the normal talent, which we have been competing with, if at all, in India market. So, I think from that perspective, we are realigning ourselves. For example, one example I'm giving you is our variable pay was less percentage as compared to the industry. So, we will introduce the variable pay more in line with the market. Similarly, we will create more incentives based on outcome in terms of productivity or Al adoption and hence, the productivity. So, we are making certain changes, both in terms of the overall HR processes. And that we should be in a position to do by end of Q2, and then we will basically do our rollout next quarter.

Details a new approach to compensation, including variable pay alignment and productivity-based incentives, with rollout planned for next quarter, impacting talent strategy and costs.

Asked by Manik Taneja