homebusiness NewsKPIT Technologies expects legacy part of business to decline and new technology to take over
KPIT Technologies expects legacy part of business to decline and new technology to take over
Reflecting on the role of KPIT Technologies in the automotive sector, the company's CEO addressed the misconception that everything in the industry is outsourced for IT services.
At a time when businesses are looking to cut costs and focus on profitability, the expenditure on new technology will continue to rise, KPIT Technologies said on December 6.
“There are two parts of expenses the company incurs. The new technology area which KPIT focuses on is roughly about 30-40% while 60% is the legacy part. That legacy part will go down every year and the new technology part will keep on growing,” Kishor Patil, Co-Founder, MD and CEO of KPIT Technologies told CNBC-TV18 in an exclusive interaction.
Patil’s remark comes as the company, which provides embedded software and product engineering services to automotive companies, has been steadfast in its commitment to maintain a 37% constant currency growth in the fiscal year 2024, along with a 20% growth in profit after tax (PAT).
Reflecting on KPIT Technologies’ role in the automotive sector, the CEO said that it is a misconception that everything in the industry is outsourced for IT services. He explained that several IT service models are being used in the market that point toward the diversity and complexity of the technological landscape within the automotive sector.
KPIT Technologies' shares ended almost a percent lower at Rs 1,463.20 on BSE. on December 6. In 2023 (year-to-date), the stock has given a return of nearly 110% percent as against benchmark Sensex which has risen a little over 13% during the period. The firm has market capitalisation of Rs 40,112.72 crore.
The company, headquartered in Pune, India, operates with development centres strategically located in Europe, the USA, Japan, and China, reflecting its global reach and influence.
Earlier in October this year, the Pune-based product engineering services provider to automotive companies, KPIT Technologies Ltd. has raised its financial year 2024 revenue growth guidance in constant currency terms.For the full financial year, the company now expects revenue growth of 37% in constant currency terms, from the earlier guidance, which ranged between 27% and 30%.
For the September quarter, KPIT Tech reported revenue growth of 9.2% sequentially to ₹1,199.1 crore from ₹1,097.6 crore in June. Net profit increased by 5.1% to ₹140.8 crore. The base quarter also had a one-time gain of ₹13.4 crore, excluding which, the net profit growth would be 16.8%, according to the company.
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