Thank you, Sagar. Good evening, everyone.

On behalf of Dolat Capital, I would like to thank KPIT Technologies for giving us the opportunity to host this earnings call. Now, I would like to hand the conference over to Mr.

Sunil Phansalkar, who is Vice President, CFNG and Head of Investor Relations at KPIT, to do the management introductions. Over to you, Sunil.

Thank you, Rahul. Good evening, and a very warm welcome to everyone on the Q3 FY26 earnings call of KPIT Technologies Limited.

Since we are still in the first month of the year, I take this opportunity to wish all of you a great 2026 and beyond. On the call today, we have Kishore Patil, Co-Founder, CEO and MD; Sachin Tikekar, President and Joint MD; Anup Sable, Board Member and COO; Priya Hardikar, CFO; and yours truly from Investor Relations.

As we always do, we will have the comments about the performance on the quarter and the way forward in the opening, and then we will shift into question-and-answer mode. Once again, a very warm welcome to you, and I hand this over to Mr.

Kishore Patil.

Welcome to Quarter 3 earnings call. Today, the way I would do is I will go through some of the highlights of the quarter, and then I would hand it over to Anup, whom you are aware he is now the Chief Operating Officer.

He used to be the CTO before this. To explain what transformation we are doing in terms of business, specifically what we have been talking about the solutions, and there have been many queries about what does it actually mean.

He would like to take couple of examples and explain so that you may get some clarity. I think I start with the financials.

Quarter FY26 year-on-year growth in terms of rupee 9.4%, in terms of dollar 3%, Quarter 3 CC 1.5%, EBITDA growth of 6.8% post absorbing partial increments. The organic growth is negative under 1% for the quarter.

Overall in the growth, if you really look at, the business which has grown during the quarter is Europe and off-highway. Off-highway commercial, that is the business which has grown.

Overall, the net profit, excluding the one-time labor code impact, is 15 1.53 billion against 1.39 1.53 billion last quarter. The charge against the labor code is 469 million post-tax.

We also paid the interim dividend during the quarter. The cash is about 9 billion after payment of 6.3 billion against the payouts of Caresoft and interim during the quarter.

The TCV value during the quarter is 202 million, largely it is across the geographies: Europe being the highest, followed by USA, and also something from China again this year from a Chinese OEM. As I have mentioned earlier, that we believe that the business is changing, the OEMs are changing, their challenges are different.

Overall, the overall business will change overall for the industry in coming years. While we continue to grow our existing business, and we do see that those opportunities, we would like to move forward and change the business ahead of time.

That's why we are moving to the solutions-based transformation. Now, there are a couple of indications there.

Our revenue is 68 66% against 59% last year. Per person revenue is up.

We have continued the investment in this business, which is more than 3.8 million during the quarter. This does not include the AI investments we are making specially in addition to this, plus this does not include the investments which we have made earlier in certain acquisitions like Technica or the recent acquisitions like N-Dream and Caresoft.

While we are here, I would like to mention that overall the way we look at forward, we see many positives out of this quarter and last six months. The first thing is the focus on AI.

We have two projects or wins which are in AI area which we are working on in the production programs we are using. The second thing is also on AI, we announced the partnership with Microsoft and Microsoft also made an announcement in terms of recognizing KPIT as a frontier partner of technologies.

Similarly, another leading CRM companies has also signed an agreement for our agentic solutions on their platform. In terms of micromobility, we have done a partnership with Hero Group, HMC Hive.

That was the recent announcement we did about a month back. We see that overall commercial and off-highway, we continue to see traction, which is based on the back of Caresoft acquisition and our other offerings.

In terms of geographies, overall we see positive discussions in USA, positive discussion in Europe, positive discussion of course in India, China, Middle East and Southeast Asia, and in certain pockets of Japan and Korea. In order to really manage this transformation as well as the readiness for growth in future, we have added a lot of leadership.

The first one, of course, I mentioned to you, Anup is now designated as a Chief Operating Officer and key managerial person. Anup has been with the company for 30 for 31 years and has played multiple roles.

We also have added multiple technology leaders in AI, also in certain domains, architecture, etc. Also, we have promoted some internal people in terms of these positions in addition to hiring from outside.

In the geos, also some of the practice teams, at a senior level, we have hired from the industry in view of our movement towards solution-based business and readiness. On the geo side, we continue to add people again from the purpose that the people can really handle the complex sales both in case of AI as well as the solution, and we will continue to do that.

This is where we are, and I would now request Anup to really take few examples about the solution business.

Thank you, Kishore. Hello, everybody.

Good evening. I would first like to sort of demystify what is a solution because many terminologies or definitions of solution could exist.

You can imagine something like an iPhone is actually a product. That means you can literally pull it out of a box, and with a minimum configuration—that means if you have an older iPhone, you can scan a barcode and eventually the new iPhone can get configured to your all contact, etc., information that is there, and you can start using it literally within 10 minutes of buying it.

That's a product. Usually sort of the most important attribute is it's mostly shrink-wrapped.

It has a little bit of configuration to be done like we spoke in terms of iPhone. When we talk about a solution, large part of the work that is required to be done for a solution is already ready with somebody like us, but there is some part of the work that has to be customized based on the customer's requirement.

These requirements could be different. These requirements could be more and less in certain cases of customers.

These requirements could actually address certain internal complexity in terms of customer setup and the customer's product. Hence there is a definite amount of work in terms of software development, in terms of validation that needs to be done to make the solution ready for the customer.

I will give you two examples of what we mean by solution. When we talk about, let's say, something that is pre-AI as a solution, there is a advanced feature inside the cars now where you can use the phone as a key.

Now before technical, from a user's perspective, what it means that you can use the phone and not have a key with you. The car detects the phone at a particular distance, unlocks the car.

Car also detects that the phone is inside the car and the door is locked, and then allows the vehicle to go in a ignition-ready state so you can switch on the ignition and then start driving the car. Similarly, when you get out of the car, it can switch off.

You move away from the car, it locks the car. Now, there are different technologies technically required, and it's a very complex system in terms of implementation.

You have multiple technologies like Bluetooth, ultra-wideband, Wi-Fi, 5G, all involved. Then you have challenges inside the car in terms of how many different computers does this particular system interact in terms of making the use cases work.

Of course, when you actually develop something like this, you need to make sure that you have integration with Apple iPhone, but it also then works with Android phones, and then it works in Android specifically with Samsung and then specifically with other Android phones that are there. All of this, large part of it is testable, reusable, but a significant part of it is customized to what the OEM would like to have.

For this, KPIT has a solution, which is a combination of the test platform and then the number of test cases that are required for certain certification requirements. There is a consortium called CCC Consortium that certifies the solution for this.

All this is ready. When we go to the customer, we can actually present a full-fledged readiness in terms of getting the customer to a stage where a new phone or a new vehicle launch can be supported.

Now, what is the advantage? There are a couple of advantages that happen because of this.

One is things are more or less ready. That means the time required for this particular activity is less.

Second, because you have done this for multiple instances, there is already a domain know-how that is captured inside, which gives an advantage both in terms of quality and again in terms of time. Of course, the overall cost for the customer is lower because most of the things are ready, and as a result, the profitability for KPIT would also be higher.

This is one example of a solution. Now, I would take another example of a fully AI-based solution because in every solution you can always have certain amount of AI to improve the efficiency, improve the performance, but I'm talking about a fully AI-based solution.

Now for this, I will give you an example of how software development happens, especially in large teams. When you want to develop a software, say, for example, what you see inside your vehicle for a digital cockpit, which is a combination of your central touchscreen, the cluster, the colorful cluster that you have, and then certain lighting that is inside, ambient lighting that is there inside the car.

Now, when you write the software for such a thing, the software is a combination of written software by OEM, written software by the Tier 1, and then the various third-party suppliers, sometimes as good as 20 different suppliers. For example, Apple CarPlay, Android Auto comes from Google.

All these systems have to be combined together and validated. When the software development is complete and the integration starts happening, there are a large number of bugs or issues that come out, which are integration issues.

Now, when you look at a complex system, significantly large software, the most critical operation that happens very close to the software or the vehicle getting launched is fixing all of these issues. Sometimes these issues could be in numbers of thousands, if not hundreds, right?

The most bottleneck operation in such a case becomes who actually decides where the problem originated from because the software has been written by 20 different players, it is residing on four different computers. Where is the defect originating from, and how to go about fixing this problem?

This is called a triaging problem. It is a very complex thing because not only you have to deal with complexity, but the number of people who can handle this in terms of understanding what the problem is and where the problem originated are limited, and hence this operation gets bottlenecked.

Now, this is a problem that we are solving by triaging as an AI-infused solution. When we have gone into the customer, we have understood what the source code is, we have understood what the architecture of the vehicle is, we have understood what the defect is, and then we have created a AI-based engine that allows what this one or two bottleneck resources used to do to immediately be done by the AI, and as a result, again, significantly reduce the time to fix the problem, also the duration for which this bottleneck has happened, that also is significantly reduced, and of course, at the end, the customer gets quality as an output, and the vehicle launch happens on time.

I gave you two examples: one which is very specific to a complex system, the iPhone case that I talked about, the phone as a key, and the second example I talked about software development life cycle, where we are actually solving a complex bottleneck-ed problem using AI as the primary engine or tool to fix this. Now, there are multiple such solutions that we are going to focus on this year in terms of going behind the customers.

These have been validated, these have been working with the customers in the last few years, and we feel confident that now we can actually go to more and more customers and allow them to leverage what we have.

Thank you, Anup. Basically, we believe that this is the direction in which the clients are going, where they would like to have a solution ahead of time and can make it available to their customers in a shorter duration, and the full ownership is taken so that there are no delays, overheads which is from the client side.

We do believe that large part of our business to convert into this part, it may take between 12 to 18 months, but naturally, specifically AI and some of the few solutions which we believe have potential would start in next 3 to 4 months. This is what I just wanted to mention today.

I think we will be happy to take any question.

Thanks for the opportunity. A couple of questions from my side.

Firstly, on the pivot to solutions-led offerings versus services-led model which we used to have, do we expect to gain market share from our peers given our solutions, or you expect that the outsourcing of work increase from OEMs versus the work which they used to do internally? That is part one.

Secondly, with this solutions-led model, do you expect any cannibalization of the existing revenue? If yes, if you can quantify it.

Sure,

yeah. Thanks for the question, Karan.

This is Sachin Tikekar. Let me answer the first part.

Obviously, when you look at solving a client's problem, and Anup described two of them, what typically happens is, in the second example, you saw that there is a hardware setup involved, there are tools involved, there is a workflow, and then there are many companies that are actually providing different kind of software. If you have to provide a holistic solution, in order to leverage the solution and have the maximum benefit, you have to look at it holistically.

Our first effort is to take a broader view of the problem and provide a comprehensive solution to solve the problem. Now, in this case, what happens is we end up cannibalizing someone else's business.

That means we'll be able to do it cheaper, better, faster for the client. If there is an existing business, part of the business has been done by KPIT, then obviously that part gets cannibalized, but the thing is, when we provide the holistic solution, we get a much bigger wallet share.

That's the model that we are applying across the OEMs, and the whole purpose is twofold: one is to solve the problem of the OEMs more comprehensively and help them get their vehicles in the production program cheaper, better, faster; at the same time, increase the wallet share for KPIT and also the margins. Yes, the simple answer is yes, this will lead to increase in a wallet share.

I think that's the answer to your first question. What was the second question?

Cannibalize our revenue as well.

Yeah. I think I answered that to some extent.

In some cases, we'll do it proactively in the interest of the client, but we always want to solve the bigger question. We will not just cannibalize our own revenue, we'll end up cannibalizing something much bigger.

Net-net, there is a wallet share gain.

Thanks. Thanks for that.

Second, on the geopolitical environment, with the new tariffs being announced by US for EU nations and new US trade deal in question, how are OEMs reacting to it? Are they comfortable to spend on their new-age R&D programs, or they may again pause before some clarity emerges?

I will talk about European OEMs. If you look at it, I think we have been seeing that and you must have seen this, that they want to move towards different supply chain in this case, and that's why basically, even though there may not be a new spend, they are moving their spend from the local vendors to India.

That is certainly a clear trend, and that happens. The second thing, they are trying to find out how they can get some new technologies.

Some of the solutions we talked about, specific solutions, I think that they would like to go for. I think the way they are looking at it, they are saving some money, they are investing cautiously in certain areas.

Naturally, they are not spending all the money, but that is what is happening in the Europe. In USA, we believe that the speed is very important because most of the OEMs in USA are delayed on their vehicle programs significantly, and I think that is where they are looking for solutions.

Some of the solutions, as Anup mentioned, really reduces time to the production program significantly, and at least also with the quality, because I think the biggest issue if you have studied, I think the most of the US companies, they have a higher warranty cost overall, and so basically, having it better quality and faster is important to them. This is in pockets.

Overall, it is also some specific to OEMs. Some OEMs are not spending and they're really not strategically taking a view, but few of them are doing it in US, and also off-highway commercial are at this point of time positively looking at making a change towards this.

Just to add to Kishor's point, the macro reading that we have from different OEMs is I think this has been going on for the last one year. This may continue for a while.

Every day, things are changing, especially coming from the US, and hence, I think different alliances are getting formed. I think the OEMs have figured out a way that this is going to be a way of life, and then they are prioritizing certain technologies and certain investments.

At the same time, they're de-prioritizing many others so that they have enough money to respond to these changes and meet the expectations of their consumers.

There are one or two geographies which seem impacted because of the uncertainty, which is Japan. Basically, if you look at, their overall market has shrunk.

Most of them were having the good share in US, which is under a doubt. Many of them were investing into US or Canada or Mexico.

Now many of them have kept their plan on hold, or that is not helping them. That's the one reason and they are getting impacted to

some. Thanks.

Thanks for the detailed color. Just last thing on the TCV, Kishore sir, TCV was a bit muted this quarter.

How is the pipeline looking, and what's the overall outlook for FY27, if you can elaborate? Thanks.

The first thing is, during this time, I think you get orders. Nobody is ready to sign a very long-term deal most of the time, but they will still have few.

The point is, this is the last quarter and it really depends upon what the budgets which are remaining with a particular OEM. This I would not read too much into it.

That we give any understanding about next year at around April, but if I have to give you some understanding, I will make only two statements. One is we believe that our last quarter, our growth will be higher.

It will be the highest growth, anyway we did not have much growth, but there will be the higher growth in the Q4. That will be the highest growth quarter from this year, and our profitability will improve from what we have in Q3 in spite of our investment.

This is one statement. The second thing is we feel reasonably, and please take me that we'll continue to tell you at Q3, but I'm just giving you my feel right now, is we will for sure grow next year higher than this year.

That we believe. We will be in a position to do it.

Now, some of these transitions which we talked about, exactly how much, when, time difference, we are a little bit not sure, we are not putting exact number right now or we'll see what we can do in here by April, what we can talk about this. This is at a high-level color I can give.

Sir. Thank you a lot.

I will fall back in the queue.

Thank you.

Hi. Good evening.

Wishing you all a very happy New Year. Had a couple of questions.

One is, see, on the solutioning, I think when we listed in 2019, we actually at that time spoke about maybe having prebuilt 15% to 35% or 40% of whatever customer seeks to build, and that's tested to be error-free code, and thereby we accelerate for clients. I think this is more or less similar, but I think you're doubling down.

If you could give some context on what that doubling down is. The second is a more conceptual question is that considering that we're able to sort of up the ante on this and maybe prebuild a lot more, shouldn't it mean, and basically at lower cost, right, time to market is shorter, shouldn't it mean that your deal velocity should be higher, right, logically, because market share gains would reflect in higher deal velocity?

Just wanted your thoughts there. Do you think that is something that we should start seeing soon, or that will sort of evolve over a period of time?

How should we sort of think about this broadly? Lastly, if you could just give some sense in terms of let's see, if you look at US, Europe, and maybe Japan, broadly, how are conversations or spends from our perspective maybe within the top three or four customers within each of those geographies, if just some color that you could give qualitatively would be very helpful.

Yeah. First thing is thank you for reminding what we said in 2019.

I think at that point of time, if you remember, we were moving towards the domains, which was electrification, autonomous, infotainment, that time, then moved to digital cockpit, that kind of a thing. We had created a certain what I would say, visible demonstrations of what the client will get ultimately.

I can say that actual usage of those into the actual delivery was not more than 5% to 7%. Actual program when we deliver, it was not more than 5% to 7% overall.

It was more towards understanding the requirement, client understanding what could be the functionalities, what are the additional functionalities, what we could deliver, our ability, skills, and this is what we could do actually. I'm talking about the actual numbers, that this is what it is.

Now, more and more, as Anup mentioned, this is not about a project. This is a full solution which you are giving to the client, and this includes people from clients who are working on this.

There's a people from us. There may be some people from other vendors, including some Tier 1s or this.

This is a more holistic solution which we are giving. There is a huge difference.

I don't know what over the period will happen, but at least 50%, 60% kind of a usability benefit in most of the solutions. As I mentioned, we have just set up the this.

About 2, 3 months back, we started making the changes. That's where Anup has a clear goal of making this transition.

Next 6 months, I think we should give here, and after that, we'll be in a better position to say. Of course, this we are doing because we expect that this will drive high-quality growth for KPIT in the mid-term.

Nitin, I think there was an external factor as well, which was, if you remember in 2019, this was the first time all the OEMs wanted to build software on their own. They started their own software companies, and they had the money and the time to do it.

The thing was, everything was built ground up. That was the approach that was taken, especially in all the SDV programs, if you think about it.

Times have changed now. Nobody has the time and the money to do this.

Plus, there is a lot of learning from all the programs that have been delivered. The expectation is all of this will get done cheaper, better, faster.

That's why we think that the adoption of our solutions in today's time is, it's likely to have much bigger impact.

Absolutely, yes.

Yeah. There was one last question, Nitin, which was about the spend on our clients from US, Europe, and Japan and their spend.

As the pressure continues on everybody on, but they have done a reprioritization. From our perspective, we see an opportunity for us to grow.

One is digital cockpit, that is true across the three geographies. The second is obviously, as you get more and more connected vehicles with OTA in them, cybersecurity becomes a bigger concern, we are seeing a lot of spend in cybersecurity.

Third is, given different countries have different approaches towards powertrain, multiple powertrain, you cannot just have battery electric. The consumers want to have options.

We see investment also in ICE now, as far as the powertrains are concerned. In countries like China, navigation on autopilot has become a default.

You cannot sell an electric vehicle unless you have navigation on autopilot in China. It's going to the US as well as to Europe, so that's another area.

These are the three, four areas where we have strengths, and we believe that the spend is going to get prioritized from the OEMs' perspective. Last but not the least, the cost reduction, the vehicle cost reduction from mechanical, electrical, electronics, and also software perspective is becoming more critical.

With the acquisition of Caresoft's business, we are also ready to help the OEMs. These are the areas where we think there is going to be a lot more traction as we get into FY27, Nitin.

Got it. Just one last one as a follow-up.

When you think about what has changed from then to now, as you said, obviously right now their ability to spend is lower and we are actually from whatever we are doing, we are helping them do it at a lower price quicker. Do you think that what we will see is maybe better margins because of the way we are approaching this, but lower growth versus historicals, or do you think we will be able to get both because we'll get higher market share?

How are you thinking on this as you look at it going forward versus how it was in the past?

See, I think we are looking at two, three different ways. We certainly believe that we can increase our market share in a medium term.

I cannot say next quarter or quarter after, but in medium term. We also believe we will be in a position to have a better tack with the AI as well as the other normal solutions.

We've talked about other adjacencies we are talking about. We do believe that both commercial off-highway and micromobility would really bring more revenues.

This is what we believe overall. This is our growth strategy.

From that perspective, we do it. We do believe that our we will be making significant investments, and that's why I talked about also earlier what investments we are making.

We will be in a position to be in the ballpark of the margins we have, a little here and there, but the similar margins in spite of the investment. In the midterm, we are very sure that the margins will improve.

On the growth side, directionally how are you thinking? You think in the context of

I did mention earlier. You'll

increase market share in the medium term. Got it.

Got it.

Yes,

I got that. I got that.

All right, though. Perfect.

Perfect. Perfect.

This is helpful. Thank you so much, and all the best.

Thank you, Nitin.

Hello. Am I audible?

Yes.

Sir, first question is on this changing strategy. Few quarters back, we were speaking about a different strategy where we were speaking about, getting the learnings from China and providing services to the European OEMs, right?

I'm just trying to understand, now we are speaking about a different all together different strategy bringing some solutions. First question is when we are speaking about the solutions, is it applicable to the existing order book or existing pipeline that we are having, or is it for the newer areas, newer upcoming pipeline that we will be getting in future, sir?

I think it is both. As you have seen that, and I think Sachin mentioned about that people prioritize what is required for actually them.

Many times that if there is a requirement, but they believe that certain features they want to put it in a car, they will prioritize it over some other things. That's why, there have been many questions.

I keep on to saying I don't know what we call whether it we call cannibalization or changing in the priority of OEMs or what, but that's why the decision happens on at that point of time from the OEMs. We are not saying anything as China demands important.

We talked about it. I think the reason the Chinese companies have been successful is they understand the consumers very well, and they created many solutions or which features which can go into the in the car very quickly.

That remains our learning and also the technology aspects. We continue to do that.

You might have seen this time this is the second OEM we have won from Chinese OEM, which we are very proud of. It's not very difficult to win a Chinese OEM.

I think

It's not easy to win.

It's not easy to win. I think China strategy is there, and it will take some time, but we do believe that we will be successful over the period.

Solution strategy is not a replacement to the, the adjacencies we talked about, the defense, China, the European part of it. This is in addition to that.

Yes. Does that answer your question?

Yes, sir. Secondly, the indications that we provided last time in Q2 regarding H2 this year, they have not yet reflected in Q3 as far as margins are concerned.

Last time, we also spoke on FY27 to be a promising growth year. This time, we are sounding a bit bearish while still guiding for a better FY27.

I just wanted to understand from you how to interpret this? Means what has changed over the last quarter?

Are we still confident for a very good Q4 that we guided last time and a very promising FY27? How to interpret it, sir?

The first thing is nobody was labor code was being discussed for last three, four years, and it came in last three, four months. Nobody knows.

It has one-time impact, and it has ongoing impact, specifically for this industry. That is the point number one.

Point number two, I would say that we I I mentioned to you about the overall investments which we will continue to make. I think we believe that it is very important from the company strategy to continue to do that and actually double down on that.

We have we will do that. Certainly, I would say that Quarter 3, I had said that it will be I think Quarter 3, we have caught a bit short, about a million dollar or so in organic growth, but that happens in this kind of a environment by even some movement of projects from now to next quarter also.

This kind of a changes happen in this kind of environment. Quarter Quarter 4, I mentioned that based on what we think, it will be better than all the three quarters we had.

It doesn't say much, but it will just says that there will be a positive growth organically, and our profitability will be still including this cost will be higher than what it is. The quality of revenue should be better.

We also mentioned that the next year will be better than this year. Now, this is what we are saying based on the pivot we are taking in terms of solutions and this.

As you know that we are we are a company which will take a leadership first and start working on that, and it has generally given us better results in the past. We have positioned ourselves and taken created a, four, five years back, we took a bet and we worked on it, which was very difficult for many people to understand, and we delivered on that.

We do believe that this will be a bet similar, it may take some time, but this will be an important pivot for us.

Understood, sir. That's it from my side, and all the best for the future.

Thank you. Thank you.

Hi, good evening, and thank you for taking my questions. I was just trying to understand on businesses which we have already won over the past 12 months, in your view, what are some of the milestones which need to be crossed before we can see some of these business ends accelerating into revenues?

Just secondly, can you share any early learnings post the Caresoft acquisitions? What are the amount or magnitude of synergies you see from this asset?

Thank you.

I may say that the pipeline what we have won, I just said that prioritization sometimes changes so it gets slowed down. Many of these deals are over three to four years, I think these revenues will convert.

I mentioned last time, we had given a number also that how much cannibalization has happened last year of because of the drop. It doesn't reflect exactly like what has been won from that perspective.

On the Caresoft perspective, I think the integration, etc., we are already in the market. We are doing quite moving forward.

As Mr. Tikekar mentioned, I think we are also adding to their capabilities and adding 1 and 1 + 1 is more than 3.

That's basically the potential. Also, off-highway commercial we see as a growth area, and I mentioned that.

Caresoft gives us some good leads into that part. I would say that this is where we are.

Also on N-Dream, which is a small acquisition relatively, we see a high potential in that specifically both in terms of growth and profitability. It is already in 2 million vehicles, and we expect it to be about 3 million vehicles next year.

This is how we start, and we are trying to see that whether we can really leverage that platform for adding more services on back of this engine.

Thank you, and all the best.

Thank you.

Thank you for the opportunity, sir. Sir, I just had a question on the transition that we are making or the transformation that we're making.

If you could take us internally, what are the metrics you're tracking to gauge the progress of this transition? As investors, how should we look at what metrics should we track, which you disclose, in order to gauge what's the progress been over the next 12 to 18 months?

The related question over there would be, ultimately, what are we looking at? What are the outcomes we are looking at?

Maybe sticky lower in number

No, can you repeat the second part? First is, in the transition from services to solutions, what are the key parameters we'll look at,

internally what are we tracking, and what is investors how should we look Yeah. Internally, what are we tracking, and what is investors, how should we Yeah.

We're probably more assured on progress. The second related question, sir, over there would be what's the end outcome over here?

Are we looking at stickier customers? Are we looking at accelerated revenue growth maybe a few years down the line or maybe better margins?

What's the end outcome? Thank you.

Thanks. From the services to solutions, the one metric that completely changes is what becomes most important to us is the revenue per employee.

That's something that we started to also write in our reports. That's one of the key measures that not only we track internally, but that's something that makes sense for the analysts and investors also to look at.

I think this becomes the most important. Other than that, I think there are many others that we have listed out that basically change related to the progress that we are making in terms of building of the solutions, getting the market ready for that, and we have to also look at our CRM with a different lens given the transition.

These are

Yeah. I think what we will do is at the end of the year, we will come out with a more detailed conversation on this, and we will share more details about it.

Right now, we have some ideas, but in next 3 to 6 months, we will have a better idea. In 3 to 4 months, we will share something, but I guess in 6 months we will be very sure about the criterias.

As in the last 3 to 4 years, we start sharing as many things as possible as soon as we have a better handle on. We will share more at the end of the year.

The second question is, what is the outcome? I think Mr.

Patil already what to expect. Obviously, increased wallet share from KPIT's perspective, and of course in the midterm, profitable growth.

I think these are the two outcomes that we really expect in the midterm as we transition from being primarily a services company to primarily a solutions company.

Understood, sir. Thank you very much, and wishing you the very best.

Thank you.

Thank you, Vimal.

Thank you for taking my question. My question is related to Qorix as well as this solution-based shift.

It sounds like what we are doing in Qorix is also solution-driven, although we are packaging it as a product. Just want to understand what is the difference, and also what is the traction we are getting on Qorix?

Qorix is both a product and a solution. Typically the complexity of a middleware software is you can never really take it shrink-wrapped, but the attempt is to make it as shrink-wrapped as possible.

Whatever you deliver to the customer, there is always going to be an effort in terms of integration, application software for that. That is the explanation on whether the Qorix is actually a product or a solution.

It's combination of both.

I think as you can see some quarter this quarter we have we have got a good profit. I don't know about the next quarter.

It is a based on the licenses. I think one thing I can tell you is there are again multiple changes which are happening.

One is the vehicle new vehicle programs have been pushed out because of the problems OEMs faced in the existing program as well as they keeping the spending, I would say postponing the spending on the new new programs. Because of that, the middleware and operating system spent went ahead.

That's the reason it doesn't have as much traction as we had expected till now, but we believe this will be As you probably know that this has become the part of a European Union software partnership, which the Europe European companies have made, and there are very significant OEMs who are part of that. We do believe that this this is something again which will be a this is very unique and we feel that this will have its fair share in some time.

Okay. Is it fair to say that Qorix is mostly focusing on middleware and architecture, whereas our solutions-based approach is granular across so many different domains?

Yes, actually Qorix is less than architecture. It's mostly middleware.

Architecture is a much more comprehensive subject, which KPIT is handling. It's not a part of the Qorix activity.

Whereas KPIT is handling, maybe across all the domains now, including because architecture is also domain for us now, including architecture domain, KPIT is handling solutions across multiple domains now.

That's helpful. Thank you.

Thank you.

Thanks for the opportunity. In this pivot to solution-driven business, is it fair to assume, as we are taking a lead in SDV ahead 1, 2, 3 years, in terms of solution-based delivery method, we are planning to repeat the same thing, which will help us in terms of winning the further wallet share and may help some of the Western OEMs both in the US and Europe to launch the new model as fast as Chinese EV players or the OEMs are launching and taking the more wallet share?

Yes, your line is not very clear, but let me explain what I understood out of the question is your question to summarize is the solution offering that we have to the OEMs going to increase or better their time to market? Yes, the answer is yes.

Most of the solutions that we are talking about, definitely some of them are really about very, very difficult thing that the OEM does during the development of a vehicle. Because we have these solutions ready, we definitely feel that the time to market will significantly decrease for the OEMs.

Okay. Just another related question, more as a bookkeeping.

In a pivot to solution, we will not change any accounting policy in terms of capitalizing the development cost. We may continue to not capitalize and take it to P&L.

Is it the understanding correct?

As you have seen, for many years, we have not capitalized anything unless there is a new investor in a certain area. In the normal course of business, there won't be any capitalizing.

Thank you. All the best.

Thank you.

Thanks for the opportunity. I hope I'm audible.

Want to understand, I'm not sure whether this is already addressed. Asia as a geography has been declining for a few quarters, and I understand we had a mega deal there.

We have a large client, and they've been backpedaling or they've been reducing spend in certain areas. Can you throw some light, what will happen in Asia as a geography and when will it restart growing for us?

Yeah. That's the first question.

We look at Asia in two regions. One is Japan, Korea, China; second is India and Southeast Asia and Middle East now.

You're right about a specific OEM. We've been doing a really large program, and all large programs come to an end.

We'll go through that. However, what we have done in Japan is we have started working with a couple of others, and hopefully, over a period of time, that will give us some growth not only in Japan, but also in Korea.

As Mr. Patil explained, we have started to see some wins coming out of China.

As a region, we believe that it will come back in some time. However, the India and Southeast Asia part will grow.

It's been growing for us, and we see a lot more growth. Now that India has become the focus for most of the OEMs across the globe, it's not only the India OEMs, the existing OEMs, the new OEMs, new-age OEMs in India, but at the same time, the global OEMs want to come and look at India, India for India, and that poses an incredible opportunity for KPIT.

I think most of our solutions will be ready in time to help these OEMs launch new vehicle programs in India. We remain very bullish on India not only now, but in the foreseeable future.

That's what I would say for now.

Asia will continue to remain stable, declining, and then start growing, it will take 6 months, 12 months? How to think about that?

That is my

I think we'll see some ups and downs. With really large programs, we have to make some adjustments, we'll see some ups and downs.

In next two or three quarters, we'll see growth coming back in Asia as well because we've been sowing seeds into new OEMs across Asia, and some of them have started to grow, some will take a little bit longer. I would say, by middle of next year, we should start to see growth coming back in Asia.

Just to add on

what he said, Asia we have broken this into two geographies, as Mr. Tikekar mentioned, and that we'll start reporting also from the next year.

We see a significant growth in this India and other Southeast Asia and Middle East kind of a geography. As we say, we won China win to that, and we have in Japan and Korea is where we will see a few ups and downs, but stabilizing towards.

Got it, sir. That's good to hear.

Second is, sir, when we speak about consolidation, right, there are three buckets where you can consolidate, right? One is obviously taking work that is getting done in the OEMs, you outsource that and gain wallet share.

Second is you gain wallet share from onsite-based vendors. Third is from offshore-led India players.

Obviously, consolidation would be a factor of all three, but where is the maximum share coming from at this point of time when you consolidate, when you try to clinch wallet share?

Not exactly like that, but in Europe, it is from the onsite vendors too.

That's right. I think it's all three.

In Europe, as Mr. Patil said, it's mostly consolidation movement from largely local vendors to more of global vendors.

With solutions, it really doesn't matter whether it's onsite or offshore, right? It's the world becomes a level playing field.

We compete, and we win against the competition.

Got it. That's good to hear.

Thanks for taking my questions, and all the best for the future.

Thank you so much.

Hi, thank you. First question is, if you look at your peer's commentary over the last few weeks, everybody is talking about demand outlook, festive season to revenues, which will mean acceleration in growth going forward.

Just curious to know do you share the same outlook, or is it something different for KPIT?

Peers have been talking about a good growth in the coming days.

Yeah. I think we have given the sense of what we are saying.

We are not saying we have mentioned how the different geographies are behaving. We, of course, as you know that as compared to most of the other, we have a much wider scope in terms of clients and the market as well as the volume.

We don't see that it's a general buoyancy, that we are not seeing. We are seeing actually the change in the behavior of OEMs and the requirements, and we believe that what steps we are taking are most important in terms of long-term growth potential, and that's why we are taking this growth.

We would not generally make a statement. We would say that off-highway commercial, there is a growth which we see, but not exactly the same statement in case of passenger across all on board.

Got it. The second question is on this AI solutions.

We have seen a lot of IT companies and even some of your peers try this solutions approach or IP-based approach in the past, but haven't seen much success out there. What is different this time which gives you confidence that the real solution can become a bigger part of your business in the next 2 to 3 years?

Is there any target you have in mind in terms of how much this solution can contribute to revenues versus the growth of the overall business in the next 2 to 3-year period?

Last 6 months, I'm personally actually executing projects where internally we are solving the problems using AI. That makes us very confident in terms of what it can do and how it can be done.

Okay? We are very clear about what AI can deliver to our customers.

I would suggest you also listen to the interview that Anthropic CEO had given during Davos. We are in full agreement with him that we have the solutions ready to solve our customers' problem.

I think it is up to the customers' adoption now in terms of how they adopt AI quickly into their life cycle. We are ready.

Yeah. I think what has changed from last time, there are two things.

It didn't work as much, a lot of lessons learned. I think this time, most of the solutions have been vetted by the clients, and some of them are already been piloted during the course of this year and last.

That gives us a lot more confidence that this time it's going to take some time as Mr. Patil mentioned, 12 to 18 months before we start to make the shift.

In the next couple of years, we would want majority of our business to come from solutions.

In fact, one thing I mentioned is we are focused only on mobility, and that gives a very different advantage as compared

to others. Got it.

Thank you.

Yeah. Thank you.

My first question is that in the last few quarters, when your growth has slowed down, has your share of the pie gone down, or you have lost market share, or the pie itself for you has gone down, or is it both?

Basically, if you look at mobility from passenger car perspective, their spend has gone down by 20% to 25%. It's a dramatic.

I think their volumes have gone down substantially, their profits have gone down even more. Except for one or two clients, we have not lost our wallet share in any of our T25 clients.

In case of majority, they have actually gained wallet share. Basically, the pie has shrunk quite a bit, and that's the reality at this point.

The other way to look at it, if you look at in industry, all other ER&D providers, and you look at their mobility business, and the year-on-year, they have a significant reduction in this sector.

Okay. My second question was so your medium- to long-term outlook, if I'm not wrong, will depend on whether these global OEMs, which dominated global market share, whether they can stop losing market share to the guys who are ahead in the new world, which is Tesla and the Chinese guys.

Am I correct in assuming that your medium- to long-term outlook really depends on these guys or then making otherwise making dramatic market share gains in the challengers who are gaining market share? That

how do you see playing out? That's a very good question.

There are three answers to your question. First is this was exactly the question people asked me in 2019.

People said that there is a Tesla and Tesla will take all the business from all the OEMs. That was 2019, 2020.

This was asked very often. That was number one.

Number two, I would say that we have started working with Chinese and we have been successful in getting Chinese clients. This itself tells us that we are doing something right, and we are very sure that this automotive business is so critical to the economy.

This is this forms roughly 15% of the GDP of most of the countries. It's very critical, and many OEMs will survive.

Actually, the transformation will help, we would be of a help to them. Third is we are also going into certain different adjacencies as well as area like off-highway commercial, where we believe that we will be in a position to grow in that area.

That's a, if I would say, broad-based strategy we have adopted.

Just to clarify, you are reasonably confident that a lot of your global legacy OEMs will survive, stop losing market share? Is that the case?

That I will say that they will continue to spend. That's what I would say.

They will prioritize their spend and they would make a call in terms of being which are the profitable lines versus another line. Their volumes you cannot say, but the people will adjust their strategy to that line.

Most of the OEMs will continue, but I'm sure there will be few casualties. That's what we mentioned earlier.

Which sort of comes to my mind is the mobile industry, where Nokia from being a market leader, you know where it is now. Do you see at least all the guys put together, here at least it's not just one Nokia, it's a lot of OEMs put together?

There's a big difference in these two industries because

You're not don't expect that to happen.

No, no, no. There's a big difference between these two because the life of a shelf life of a mobile phone versus the life of a car, which is there on the road for 12 to 15 years, is very different.

The type, what it requires is very different. It's a different ecosystem and life cycle.

Thanks a lot.

Hi, thank you for taking my questions.

Is it better now?

Yeah. Thanks for taking my questions.

I have two questions. The first is as you highlighted, mobility ER&D budgets have fallen sharply last year.

Just an initial sense of your conversations, what does it suggest for this year? Do you expect stabilization?

Do you expect decline to continue, or is there some growth also that you're building in? Just wanted some color on that.

Yeah. Ankur, as I mentioned earlier on, of course, all the OEMs continue to be under pressure.

The overall spend is not likely to go up. However, there are certain areas where they are prioritizing spend, and I called out those areas earlier.

Those are the areas where we actually specialize. We have deep specialization: digital cockpit, cybersecurity, then navigation on autopilot, and also multiple powertrains.

I think this is where they're prioritizing their spend, and we are also bringing in the cost reduction element from the vehicle perspective. These are the five areas that are in fashion in the minds of the OEMs, and we are ready to take those on.

Thanks. My second question is with respect to the solutions pivot.

Now historically, for AI and prebuilt solutions, OEMs have been generally wary, given that there are risks involved in a vehicle. What is changing this time, and given the upfront nature of investments that you would need to make on this, what gives you the confidence that multiple solutions will see broad-based adoption across OEMs?

They would have been vetted by a few clients, but what gives you confidence of the broad-based nature of adoption there?

I think it is our experience. I think in both the cases we know and now the few more discussions we are having, it is not a choice for them.

It is not IT, where they have a choice to do something or this other. Here they are stuck with the production programs and they are not sure whether they can really come out with a vehicle.

This happened with two OEMs, and now we have some more discussions. In order to take it out, there are hardly any alternative solutions, and where we are ready to take the whole responsibility.

We are not just giving a tool, we are not doing what they tell us to do. We are ready to take the full ownership and deliver.

Perfect. Thank you, and all the best for CY26.

Thank you.

Thank you.

Hi. Thanks for taking my question.

Just want to follow up on the customer project that you said is coming to an end in Japan. I think after we announced the mega deal with Honda, JPY revenue went from being somewhere around 10 million a quarter to all the way up to 40, and now it's to 30.

Where does this sort of bottom out in terms of this engagement? Because I think at the time that the engagement was announced, we said that KPIT will work with Honda through 2030.

Has that been part of the reprioritization in any way? No,

I think that is correct. We'll continue to work with them, and there are different programs we are continuing to work with them.

This program is as other programs, it has delayed. Some of the new programs have been a little bit pushed out, and some of these changes are because of that.

We are strategically in place with the OEM, and we'll continue to work 2030 and beyond. Typically, our OEM engagements, if you have seen, there are many OEMs we are working for 20 years, and the business has not gone down.

It keeps on going up, it takes some time. This was a very large deal, and specifically, I talked about Japan part, where the economy has got impacted, specifically through the uncertainties and etc.

There are what I would say the delays in the production program for the taking up the new programs, investing into new programs. That may impact a little bit.

It will impact to some extent, but it will not going to be a zero or something.

Okay. Are we close to steady state right now, or is there more sort of

We will get a better handle. I would say we don't know.

In one or two quarters, it may go down further or not. Over the period, if you look at the end of the year, we would be more because then the new opportunities which are happening, new programs which are happening will catch it.

It's very hard to tell quarter to quarter client wise. We never give any answer on.

Fair enough. Okay.

That's it from my end. Thank you.

Thank you.

Thanks for the follow-up. Just a bookkeeping questions.

Interest cost has inched up in last two quarters. Do you expect this to remain elevated in next few quarters or maybe in FY27?

Secondly, depreciation has also increased to 81 crore after full integration of Caresoft. Shall we expect this depreciation line item to stabilize from here on?

Yes, depreciation line item will stabilize. This quarter, it had a full impact of N-Dream customer intangible as well as one month of Caresoft.

It will stabilize. Second question was on the interest cost.

In interest cost, we did have interest cost on the borrowing that we had the previous quarter, as well as some of the Ind AS cost on the goodwill calculations and the acquisition accounting. Yes, the both these costs will stabilize now.

Priya ma'am, this interest cost, shall we assume this 23 crore as a run rate for future quarters?

No, it can lower a little bit, but, yeah, more or less in the same range.

Thanks. Thank you, ma'am, and all the best for FY27.

Thank you. Thank you.

I think we are already over time, I think we should end the call now.

Thank you very much. Thank you, everyone, for being on the call, and wish you all the best.

Thank you. Bye.