KPIT is an A /T+1group, Computers - Software & Consulting company with having Face value of Rs. 10. KPIT is a global technology company with software solutions which can help mobility leapfrog towards autonomous, clean, smart and connected future. With 10000+ clients across the globe and specializing in embedded software, AI & Digital solutions, KPIT enables its customers to accelerate the implementation of next generation mobility technologies with its development centers in Europe, USA, Japan, China, Thailand and India. The company generates 37% of its revenue from Powertrains and 19%, 11% and 33% from AD-ADAS, Connected vehicle and others. The Companies’ focuses on futuristic initiatives such as Leader in Platforms and Practices; Zero Defect Delivery – First time right; Best Place to Grow for employees; and focus on T25 Clients.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was Rs 424.13 crore in March 2023 up 27.78%, Quarterly Net Profit at Rs. 74.21 crore in March 2023 down 13.94% and EBITDA stands at Rs. 123.29 crore in March 2023 up 4.93% as compared to March 2022.

Key Points:

1. In 2022, KPIT won a multi-million-dollar strategic engagement from a leading European Car Manufacturer in the Electric Powertrain domain which had a deal value of $ 50 million. A leading European OEM selected KPIT as its key partner for next generation ECU and Renault Group also selected KPIT as a strategic technology partner.
2.  KPIT Technologies recently acquired Technica Engineering, a company specializing in production-ready system prototyping automotive ethernet products, and tools for validation. With the help of this deal company creates across-the-stack expertise offering a one-stop shop for the industry to transform towards SDV (Software Defined Vehicle).
3. KPIT recently strengthened its presence in the US with a new software excellence center in Michigan which will accelerate software-defined vehicle development for mobility OEM giants and Tier 1s within the US.
4. KPIT Technologies has partnered with Honda to accelerate the journey of Honda’s Software-Defined Mobility (SDM). With Honda’s next-generation software architecture and control-safety technology and KPIT’s deep domain & software expertise　in the areas of Autonomous Driving, Vehicle Electrification, In-Vehicle Infotainment systems and Platform Software, Honda will be able to provide various services and enhanced value to customers around the world in the future.
5. dSPACE which is one of the world’s leading providers of simulation and validation solutions have teamed up with KPIT to offer comprehensive solutions test suite for smart charging.
6. KPIT Technologies has also teamed up with Microsoft to offer a unique solution for OEMs and Tier-1s seeking homologation (self-certification in the USA) for advanced driver assistance systems and autonomous driving.
7. KPIT Technologies and ZF Group, a global technology company supplying systems for passenger cars, commercial vehicles, and industrial technology have agreed to form an independent company named QORIX to develop and distribute open and scalable middleware products and solutions for the mobility ecosystem.
8. KPIT Technologies has been selected by Renault Group as a strategic software scaling partner for next- generation SDV programs.
9. KPIT Technologies Ltd has also acquired cloud-based vehicle diagnostics specialist SOMIT solutions which Opens up new possibilities into the multi-billion automotive aftersales market and addresses a higher value share in Top 25 clients
10. KPIT along with PathPartner (part of KPIT since 2021) Technology has developed a Software Excellence Centre in Kochi. It will benefit 100s of professionals looking for cutting edge opportunities closer to home
11. KPIT and Coventry University which based in the United Kingdom announced have announced a new Master of Technology for KPIT’s employees based in India.

In last 3 years the stock gave a return of 173 % as compared to the rise of Sensex and Nifty in the same period.

KPIT is functional in futuristic areas of automobile industry such as AI, ADAS, EV and many more intelligent and tech driven systems which brings the future mobility closer and closer day by day. KPIT is also a member in the SOAFEE SIG which aims to bring the benefits of a cloud-native development environment to address the specific challenges and constraints of the automotive domain such as functional safety, fast and precise real-time control. On valuation front company has delivered good profit growth of 327% CAGR over last 5 years and it has been maintaining a healthy dividend payout of 25.6%. Considering all the fundamentals and its futuristic investments in EV, ADAS, AI and many more future driven sectors with OEMs across the globe and partnerships with well-known companies, it is well poised to enjoy good cashflow going further, so it can be added in portfolios for a long-term period.

- HET ZAVERI

- info@smartinvestment.in

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( A tech company with focuses on futuristic technologies such as Autonomous Driving & ADAS, Electric & Conventional Powertrain, Connected Vehicle, Vehicle Diagnostics, AUTOSAR, Vehicle Engineering and Design and Digital Connected Solutions. )