KPIT Tech’s deal with BMW Group won’t be margin dilutive, says co-founder Kishor Patil

KPIT Tech has bagged a large scale order from German carmaker BMW Group. The significance of the BMW deal is for their electrification architecture, said Kishor Patil, Co-founder, MD & CEO of the company.

“We have been their partner for electrification and autonomous. This is one of the new architectures. In Europe, there are 3 things which are happening. One is there are very significant compliance rules which the government is putting. Secondly, there is incentive given for electrification and for electric cars. Third, is all the major players want to make sure that they get a larger share of electric cars in Europe. So BMW being on top of it, the significance of this order is in that light,” he said in an interview to CNBC-TV18.

Patil also said that the deal will not be significantly margin dilutive and they will maintain their 14 percent margins.

“This certainly is a very significant program which will have initially a larger on-site component which we have started working on already. We would be taking a larger part of the work later on off-shore. So I do not see this as margin dilutive to where KPITs margins are today.”

Additionally, the company had recently also announced that it will not go ahead with the planned acquisition of Vayavya Labs.