October 29, 2024

BSE Limited National Stock Exchange of India Ltd.,

Phiroze Jeejeebhoy Towers, Exchange Plaza, C/1, G Block,
Dalal Street, Bandra - Kurla Complex, Bandra (E),
Mumbai- 400001. Mumbai – 400051.

Scrip ID: KPITTECH Symbol: KPITTECH

Scrip Code: 542651 Series: EQ

Kind Attn: The Manager, Kind Attn: The Manager,

Department of Corporate Services Listing Department

Dear Sir / Madam,

Sub: Transcript of the Post Earnings Conference Call for the quarter ended
September 30, 2024.

In terms of Regulation 30 and 46 read with clause 15 of Para A of Part A of Schedule

III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
please find enclosed the transcript of the Post Earnings Conference Call for the
quarter ended September 30, 2024, conducted on October 23, 2024, after the
meeting of the Board of Directors for your information and records.

The transcript of Post Earnings Conference Call is also made available on the
website of the Company. The link to access the same is as below:

https://www.kpit.com/investors/policies-reports-filings/

Kindly take the same on your records.

Thanking you.

Yours faithfully,

For KPIT Technologies Limited

DESHPANDE Digitally signed by

DESHPANDE NIDA YUNUS

NIDA YUNUS Date: 2024.10.29 15:09:44

+05'30'

Nida Deshpande
Company Secretary & Compliance Officer

KPIT Technologies Limited O +91 20 6770 6000

Registered & Corporate Office: Plot No. 17, Rajiv Gandhi Infotech Park, MIDC-SEZ, E [email protected]
Phase-III, Maan, Taluka-Mulshi, Hinjawadi, Pune-411057, India. W kpit.com
CIN: L74999PN2018PLC174192
 “KPIT Technologies Limited
Q2 FY '25 Earnings Conference Call”
October 23, 2024

MANAGEMENT: MR. RAVI PANDIT – CO-FOUNDER AND CHAIRMAN –

KPIT TECHNOLOGIES LIMITED
MR. KISHOR PATIL – CO-FOUNDER, CHIEF EXECUTIVE
OFFICER AND MANAGING DIRECTOR – KPIT
TECHNOLOGIES LIMITED
MR. SACHIN TIKEKAR – PRESIDENT AND JOINT
MANAGING DIRECTOR – KPIT TECHNOLOGIES LIMITED
MS. PRIYA HARDIKAR – CHIEF FINANCIAL OFFICER –
KPIT TECHNOLOGIES LIMITED
MR. SUNIL PHANSALKAR – VICE PRESIDENT AND HEAD
INVESTOR RELATIONS – KPIT TECHNOLOGIES LIMITED.

MODERATOR: MR. RAHUL JAIN – DOLAT CAPITAL MARKETS LIMITED

Moderator: Ladies and gentlemen, good day, and welcome to KPIT Q2 FY '25 Earnings
Conference Call hosted by Dolat Capital. As a reminder, all participant lines
will be in the listen-only mode, and there will be an opportunity for you to

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October 23, 2024

ask questions after the presentation concludes. Should you need assistance
during the conference call, please signal an operator by pressing star, then
zero on your touchtone telephone. Please note that this conference is being
recorded.

I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank
you, and over to you, sir.

Rahul Jain: On behalf of Dolat Capital, I would like to thank KPIT Technologies Limited
for giving us this opportunity to host the earnings call. And now I would like
to hand the conference over to Sunil Phansalkar who is VP and Head of IR at
KPIT to do the management introductions. Over to you, Sunil.

Sunil Phansalkar: Thank you, Rahul. A warm welcome to all on the Q2 FY '25 Earnings
Conference Call of KPIT Technologies Limited. I also take this opportunity to
wish you and your loved ones a very Happy Diwali. On the call today, we have
Mr. Ravi Pandit, Co-Founder and Chairman; Mr. Kishor Patil, Co-Founder, CEO
and MD; Mr. Sachin Tikekar, President and Joint MD; Ms. Priya Hardikar, CFO;
and yours truly from Investor Relations. So, on the call today, we will have
the opening remarks by Mr. Ravi Pandit and by Mr. Kishor Patil and post which
we'll have the floor open for questions.

So once again, welcome all and I'll hand this over to Mr. Pandit.

Ravi Pandit: Thank you, Sunil. Good evening, and welcome to all of you. In this call today,
we want to talk about three things. One is the Board resolution regarding the
appointment of Mr. Vijay Gokhale. Then we are going to talk about the Board
resolution regarding the QIP. And then we will talk about the operations of
this quarter and how the rest of the year looks. I'm going to talk about the
first two points, and my colleague, Kishor Patil will talk about the third.

So, over the years, we have recognized that as we are growing in scale, the
geo-economics and geopolitical considerations are becoming more and more
important to us. Therefore, understanding how these conditions are changing
over a period of time is critical for us. With that in mind, we were looking to
appoint a suitable person on our Board, and we are extremely happy that Mr.
Vijay Gokhale had accepted our request to come on the board of the company.

Mr. Gokhale has had an illustrious career in the Indian diplomatic service,
Indian Foreign Service. He has worked in all the three geographies, which are
very critical for us: Asia, Europe and the US. He has served in the diplomatic
missions in Hong Kong, in Hanoi and in Malaysia, and he was also our
ambassador for People's Republic of China. His knowledge about China has

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October 23, 2024

been very widely recognized. His books from China have been extremely
popular, and they are extremely incisive.

Considering the plans that we have for China; we believe that his inputs in
this area would be very important. He has also served as the ambassador of
India to Germany. And therefore, that's yet another market, which is very
important for us. And therefore, his expertise in that area matters a lot. Lastly,
he has also served at diplomatic missions in New York. And that's really our
third major segment of market. And therefore, we are extremely happy to
have him on our Board.

Our Board has passed the resolution requesting his appointment. And now we
will take this resolution to the general body very shortly, so that his
appointment becomes effective. The second resolution that we had today
was about the proposal to raise capital via the QIP group. As you know, over
the years, we have grown organically through our multiple initiatives.

Over the years, we have done acquisitions, and we have also done
investments in new assets. Our acquisitions have been done for the purpose
of increasing either our presence in the market or increasing our depth in
various services. We have also invested, as you know, in building facilities,
etcetera.

As we continue to grow, we foresee the possibility of such acquisitions in the

times to come. And they may be not so small that we can do the complete
fundraising through our own sources, which is what we have done over the
years so far. Therefore, keeping this possibility in mind, we have now taken
an enabling resolution from the Board and which is what again we'll be
proposing here is for raising capital via the QIP route up to a maximum of
INR2.88 billion implying a dilution of up to 6% at the KPIT market cap of
INR48,000 crores or INR480 billion. We will be seeking approval from the
shareholders via postal ballot for raising capital.

Now I would like to stress again that this is an enabling resolution. By the
provisions of the act, we can use this resolution for a period of 12 months to
raise the capital. And we will go for it as soon as we find there is an
appropriate opportunity to deploy this capital. So, you will hear from us about
it as and when we are in that juncture. So, these are the two issues I wanted
to talk to you about.

And now to hand over the mic to my colleague, Kishor Patil who will talk to
you about the results for this quarter, which I'm sure you will be happy about.
Over to you, Kishor.

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October 23, 2024

Kishor Patil: Thank you, Ravi. Good evening, and welcome to our quarterly Q2 results,
basically giving 17 consecutive quarters of growth both in revenues as well
as profits. So, during this quarter, the revenue grew 20.1% year-on-year in
constant currency terms and 19.3% in dollar terms. The growth has been
largely driven through Asia.

And when we talk about Asia, in this case, it is more about Japan, Korea and
India. It is driven by Powertrain and Middleware as the practice areas, and the
passenger car basically is grown by 5.3% quarter-on-quarter and 26.4% year-
on-year.

The EBITDA is at 20.8%, which is 27.7% year-on-year growth over the last
quarter this year. This is after absorbing the increments, which we had given
proper full increment. And also, additionally ESOP-cost. Last quarter, it was
only an impact of 2 months. So, this quarter is of the whole cost. So, after
absorbing 2.7% impact, our EBITDA is at 20.8%. Our PAT is at INR203 crores,
and it includes INR29.3 crores of one-time profit. This is on account of a claim,
which we got from insurance. This was about 10 years back, almost 10 years
back when before the demerger we had a claim on an insurance company
against a dispute with the client. And that we have got after more than 10
years, nevertheless, that has come handy during this quarter. Last quarter
also, we had a onetime additional income of INR32.7 crores.

The profitability has increased on account of two main reasons. One is the
fixed price projects. It is our endeavour to increase our fixed price projects as
much as possible. There is a significant growth in fixed price projects over
last year and this quarter. That helps us to make use of productivity increase
what we are bringing every quarter and also due to the increased offshoring.
These are the main reasons why our profitability has gone up despite
additional expenses during the quarter.

Then on the people side, our attrition is absolutely the lowest ever. And that
allows us to really be ready to focus on building competencies and building
the right workforce, right talent for the complex projects for the future. If you
really look at the overall environment currently, particularly at U.S.A. In the
U.S., the overall environment, there are opportunities, at the same time, there
is a little bit of tentativeness. However, in USA, we see opportunities for two
reasons. One is USA has banned China software already. And we do believe
that will help us in providing that kind of a software or integration
opportunities to US OEMs.

The second thing is off-highway and commercial vehicles, which is our second
area of focus. And we see that there would be a good opportunity in that. So,
these two, we see as a growth opportunities in this otherwise uncertain

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October 23, 2024

environment. In case of Europe, we believe that most of the European OEMs

are certainly struggling in terms of their financial performance. And however,
we believe that in due course, there will be a consolidation and due to both
the competence, relationship and the scale, KPIT will be a beneficiary of the
consolidation. Even in Europe, we see that there will be an opportunity in off-
highway and trucks.

Coming to Asia. Asia, we believe Japan, Korea and India will continue to grow
and we see significant opportunities, both in terms of our existing Diamond
clients as well as some of the gold clients growing further. There are
opportunities while some of these companies are also struggling. If you look
at it, it's a mix in terms of OEMs. Some of the OEMs are doing very well and
some of the OEMs are struggling. And we see the same opportunities
wherever the OEMs are struggling that they would look for a significant
consolidation as well as the competency to expedite their road map and that
we see that as an opportunity.

And the second is our current strong clients continue to grow, and there are
more opportunities we see. In case of China, we continue to engage with
Chinese OEMs for two reasons. One is to understand and be a part of
ecosystem of innovation. So, we understand what is happening in China and
take it to our clients outside and engage with them in a very select areas
where we can add value both for their forays in international markets and in
certain specific areas in terms of compliance, etcetera.

Apart from this organic growth, as Mr. Pandit mentioned, we see certain
market shifts happening in the overall market. Market shift is happening
significantly and OEMs are looking for cost reductions, improved consumer
experience and their increased compliance requirement. We are looking for
some inorganic initiatives to address this and tap into this growing
opportunity for us. And we would do it only when, as you know, only when
we find a very suitable candidate, which will help us to really establish our
leadership in that area.

On the other investments which we have made in terms of QORIX. In QORIX

at least certain revenues have started , though for the large offerings which
we have, it will take some time. It has become a part of Eclipse Foundation
and Covesa Foundation. And these two will certainly help us in our endeavour
to make it really an industry-leading platform.

N-Dream, which was our gaming company, again, we have done our
investment of the second tranche taken it 26% during the quarter. N-Dream
has won more programs with other OEMs. And I think that is going to help us

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October 23, 2024

in helping clients to create a cockpit for the future and more integration
revenues in due course.

With this, I would also like to say that our pipeline continues to be strong
with our current wins during the quarter of $207 million which I mentioned
about the various reasons why we will continue to see opportunities in the
market. These are across the geographies. These are across Europe, U.S. and
Asia. And with this in mind, I would like to reiterate our guidance for the year.

We believe that due to cost reduction, which we have to give to our clients,
both on fixed price and especially basically reducing the cost for them. The
revenues will be on the lower side of guidance while the profits will be on the
higher side, while we have talked about 20.5% plus, it will be a few 0.2 to 0.3
decimals higher than what we have mentioned earlier.

So, with this, I would like to hand over to operator for the question.

Moderator: Thank you very much, sir. We will now begin the question-and-answer
session. The first question is from the line of Chandramouli Muthiah from
Goldman Sachs.

Chandramouli Muthiah: First question is just on the commentary you made during the prepared
remarks around guidance that you're reiterating. So, I think you have given a
range of 18% to 22% Y-o-Y constant currency revenue growth and 20.5% or
higher EBITDA margin.

So, in the first half, we seem to be tracking at the higher end of the range,
sort of 21-ish percent constant currency revenue growth and EBITDA margin
also closer to 21%, so I just want to understand how you think about the back
half. And then in the context of your commentary that, that growth might be
at the lower end of that 18% to 22% for FY '25?

Kishor Patil: So right now, as I said, overall, the environment of the business, basically, the
OEMs are extremely cautious. And we believe that our pipeline is very strong
and not only that, that we are actually engaging in some very mega
opportunities with a few of the clients. But we are not sure about their timing
when these large opportunities be realized during this time.

While we again reiterate our guidance, we believe because of some of the

postponement of some of these and the offshoring of many of these
opportunities more than what we have done in the past. The top line may
look on the lower side of the guidance. And at the same time, because of the
offshoring and of course, the momentum we have, the profitability will be on
the higher side.

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October 23, 2024

Chandramouli Muthiah: Got it. That's helpful. Second question is just around the fund raise. So, you
mentioned that it's enabling resolution for the next 12 months. Just wanted
to understand, I'm sure we are already prospecting potential candidates. So,
any color around is there any specific geography or any specific domain where
you're looking for assets and also sort of what might be the realistic time line
for potentially closing on some of the assets that you're considering?

Kishor Patil: So, we continue to prospect always with our current positioning, I think,
fortunately, a lot of companies do approach us on an ongoing basis. We
believe there are areas of growth, which we have identified. One is in terms
of cost reduction, specifically. And the second, we have talked about
adjacencies. And we have talked about certain compliances or certain key
areas which are required for companies to work internationally. So, in these
three areas, we are mainly looking at. There are also a few in China, small
ones, but we are looking at this.

So, there are such I would say, 4 or 5 types of companies. There's no one very
large, but reasonable size 3, 4 opportunities. Also, in addition to that, I must
say that we have some very significant opportunity for consolidation and
mega deals. We do not know whether the clients -- what time frame this can
be realized, but it will also require certain investments in terms of
infrastructure and etcetera, from our side. And with all this, we are looking
for as much as we can, and you know that we have very strong cash flows.
As much as we can, we would do it on our own. And when there would be a
significant kind of opportunity, right opportunity in these areas, we would look
for the funds.

Chandramouli Muthiah: Got it. That's helpful. And just last question is as we head into 3Q, historically,
we've had sort of different trends in certain years, we've had 3Q because of
furloughs and holidays tends to be seasonally slightly slower. And in some
years, we actually had a pickup in 3Q performance. So, I just want to
understand, based on some of the deal wins you've had recently, what is your
thinking on how 3Q might be relative to the first half?

Kishor Patil: So, while we have got very strong good wins in last 2 quarters, based on the
environment, we are not 100% sure when they would start. And so, I would
consider it not so strong quarter 3 from that perspective. As of now, that's
how we would put it.

Moderator: The next question is from the line of Mr. Nitin Padmanabhan from Investec.

Nitin Padmanabhan: Congrats on another solid quarter. Just wanted your thoughts on a couple of
things. So, the first is see, we have historically seen that our growth has
consistently been very solid for maybe the last -- maybe 15 years plus in this

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October 23, 2024

segment. And the only time you really have a real weakness is when there is
some major economic impact.

Now in that context, when we look at Europe and specifically Germany where
it seems to be in a recession, and that's usually the time when we see the
play. How would you sort of contrast what you're seeing in terms of
behaviours on spending by OEMs today versus what you would have seen
during earlier similar periods, whether it's during the COVID period or the GFC
period. How would you sort of contrast it?

Sachin Tikekar: Nitin, I think it's a great question. And the point here is, as you know, some
OEMs are under tremendous pressure at this point in time because of various
reasons: A, the competition from China; B, the overall economic scenarios
across some of the key markets. So, I think there is pressure on certain types
of OEMs, especially right now, the pressure is more on Europe because they
are more exposed. European OEMs have large sales in China and they are
getting compromised. At the same time, the European economy is not doing
as well.

The US OEMs, to some extent, because of the 100% tariffs that they have,
they are not facing the competition as much from China, but they see
competition from the rest of the global players. And as you know, the Asian
OEMs always look at the long game and they will make investments for the
long term, and they will not look at quarter-by-quarter.

So, if you look from a passenger car perspective, of course, there is pressure.
And right now, they're all looking to get their -- the cost of the vehicles in the
right shape. And that does create a lot of opportunities for us. It's just that,
as Mr. Patil mentioned earlier, they have to reconfigure some of these things,
and that does take a little bit of time. So, we believe that this will create a
good environment for us from the growth perspective. And hence, as you
know, in the midterm, we do see a solid pipeline coming our way. It's just that
we have to get through the next few months of uncertainties for some of
these OEMs. So that's our read on the passenger car side.

On the off-highway side, the cyclical nature of the agriculture, I think it's
getting over. So, we think that the growth will actually come back. And it's
the same case with trucks. Trucks have been slightly on decline and flattish
in the current year. I think next year, they are likely to be around the same,
but 2026 onwards, there will be growth on the commercial vehicle side. And
that's mostly about Europe and Americas.

So overall, we believe that some of the themes will continue from the OEMs
perspective, it's the reduction in the cost of the vehicle, reduction in the time
to market of the vehicles as well as the features. And the third part is also

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October 23, 2024

trying to figure out in this changing environment, their client segments in

different markets for the global OEMs. And how do you really -- how do they
really differentiate themselves. And that's something I think everybody is
trying to figure out, right, what it means in the change environment. Does that
answers your question, Nitin?

Kishor Patil: If I may add also that the conversations are actually happening. I mean they
are very serious conversations which are happening. We are saying it's a bit
of timing we are not 100% sure of the conclusion.

Nitin Padmanabhan: Got it. So actually, I had 2 follow-ups. So one is that what you're seeing today
is not so much of a rate reduction, but more of offshoring to sort of help
clients sort of release their overall cost. Is that a fair assumption? And two,
from that perspective, maybe there is near-term lower growth, but as and
when things pick up, they sort of pick up. So that was one. The second is, do
you think that Asia makes up for the related weakness from an incremental
revenue contribution perspective, considering that geography seems to be
recently solid. Do we have the pipeline and events to really make up for the
related weakness?

Sachin Tikekar: So, Nitin, in the immediate future, I think the growth is actually coming from
Asia. You've seen that in our Q2 H1 results as well. And we believe that, I think
that growth will continue throughout. Having said that, we really believe --
again, going back to Mr. Patil's comment, there are European conversations,
some serious conversations with the European OEMs as well as the American
OEMs.

So, we believe that the growth will come back, we just start to figure out the
timing. Is it 1, 2, 3 quarters, whatever that may be, because it's the
reconfiguration of their priorities and hence, what kind of business model in
which we work with them? So, it's just going to take a little bit longer. But we
do believe that there are significant opportunities in Europe with passenger
cars as well as trucks, and in Americas for off-highway and passenger cars.

Kishor Patil: And just to elaborate on that point, actually, our wins for last both the
quarters have come from larger deals have come also from U.S. and Europe.
However, there is a delay in starting of the projects, and that's what we are
looking at in addition to the larger engagements.

Nitin Padmanabhan: I just have one more quick question and then I'll fall back in the queue. The
fund raise that you spoke about and the areas that you spoke about. Is this
sort of pre-emptive to the large opportunities that you're seeing would you
need to -- do you think we'll need to buy out existing vendors who are there
for that particular client as a part of that exercise or was the other...?

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October 23, 2024

Kishor Patil: We are not looking at buying out any vendor or anything from that perspective,
not those kind of, but the large consolidation will require infrastructure
depending upon the deals basically building the infrastructure here as well as
outside people, investment, etcetera. And many of those kinds of things.

And apart from that, certain competency, as I said, we know that on the top
of mind is the cost reduction for every OEM and certain other areas where we
want to make sure that we are -- as we have been in SDV and other areas
ahead of the market. And that's why we will make those investments in a very
high-quality company.

Moderator: The next question is from the line of Bhavik Mehta from JPMorgan.

Bhavik Mehta: So, a couple of questions. Firstly, on the offshoring, can you explain like what
is suddenly driving this offshoring, is this just cost efficiencies that clients are
looking at their end they want to move offshore. Or is there some other
factors as well? And also, is it right to assume that the volume of the work is
already impacted, but the pricing is mainly because of onshore to offshore
movement?

Kishor Patil: Absolutely, I think the first part is the volume is not impacted. Volume is
growing. While we are trying to increase our productivity and other things, as
you can see, we still continue to add net headcount in some ways and improve
the productivity both. And the offshoring is happening for two reasons.

One is we have delivered a lot of complex projects and now when they are
scaling up, that's when we are increasing it offshore and client is very
comfortable because of the history they have with us and the work we have
been doing. So, I think with both these things, we are in a position to increase
the offshoring.

Bhavik Mehta: Okay. Got it. Second question was on the QIP fund raise, just a clarification.
Will you say that it won't be just one large M&A could be two or three
companies also you may acquire with the fund raise.

Kishor Patil: Absolutely. So, it's not a single transaction.

Moderator: The next question is from the line of Garvit Goyal from Nvest Analytics
Advisory LLP.

Garvit Goyal: Congrats for a good set of numbers. I have two questions. One is like
considering that we do have cash and cash equivalent of approx. INR950
crores, right? So, I want to understand from you two things. One is how
management read to the numbers specifically INR 2,880 crores QIP what is
the thought process behind it?

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October 23, 2024

Secondly, you mentioned about three areas. Can you put some more color on
all those three areas, like what is the thought process, how we are looking to
diversify from the existing business by going into these three areas? So, these
are my questions.

Kishor Patil: First thing is we have cash and continue to have a very strong cash conversion.
As we said, we had to make multiple investments and we have been making
those investments all these years, but we have to make it in infrastructure.
We have to make it in some pay-outs of the old acquisition, we have to make
it into some of the new acquisitions we make.

So, I think when we are looking at it, we are looking at holistically. Right now,
if you look at it, it is about 3 months kind of a cash is what we have, which is
not too much from that perspective, but that would allow us in a normal
course of growth in our organic way.

But when we look at the new acquisitions, that's the time when we will look
at the fund raise. I think I mentioned already; I think it is about the
adjacencies. It is about the cost reduction and it is about certain specific
compliance-related practices. I think we have talked about it a few times
earlier also so. Anything beyond this would be difficult.

Garvit Goyal: One more question on the demand environment. Like you mentioned for next
1, 2, 3 quarters going to slowdown. So how do you see the FY '26 from this
kind of situation?

Kishor Patil: So, we have made 2 statements. One is our growth, we are reiterating our
guidance, number one. Number two, our revenues will be on a lower end of
the guidance because of the offshoring and other things, while the
profitability on the higher for the same reason, that is the second part.

Third thing we have said that our pipeline is strong, and our conversations are
very strong for the large strategic deals. We had talked about the environment
in all the 3 geographies specifically. So, we are very confident about the
demand going forward. We have always come forward to share what is
happening in the market as well as what we are going to do about it. So, I
think in that context we talked about the external environment.

Moderator: The next question is from the line of Aman Soni from Nvest Analytics Advisory
LLP.

Aman Soni: My question is already answered.

Moderator: The next question is from the line of Karan Uppal from Phillip Capital India.

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October 23, 2024

Karan Uppal: The first question is related to the incremental spending. So, amongst various
areas like SDV, Middleware, Electric Powertrain, autonomous, mechanical. So,
which are the areas which are driving the incremental spending from OEMs
and which are the ones where spending is being pushed back. Any color would
be very helpful.

Kishor Patil: So, number one is the cost reduction, whatever allows clients to reduce the
cost of the final product, they are very interested. Right now, that is number
one priority, specifically on even the electrification as well as otherwise. So
that is the number one part. The second is they want to reduce the program
life cycle significantly. I want to make sure that the programs which they have
announced for '26, '27 or '28 as the case may be, those are not delayed and
those are delivered and if they can be delivered before because many of these
OEMs have relatively less number of programs as compared to the Chinese or
other OEMs.

So, these are the two areas always the spend is happening. So, the investment
on SDV continues to be there, but it is only on the area where you can reduce
the time or the cost and the overall cost reduction part, these are the 2, and
the third, which I mentioned about is on the compliance.

Karan Uppal: Okay. The second question is basically, if you just step back and look at, let's
say, FY '24 and '25. So, the large part of the growth was driven by large deals
like Renault and Honda, which we signed earlier. Now if I look at the TCV for
last 6 quarters, except for Q4 FY '24, the TCV has been in the range of 150
million to 200 million. So, you've also spoken about large deals in the pipeline.
So, are you expecting any large deal to close maybe in Q3 or Q4, which can
help you on the growth trajectory for FY '26?

Sachin Tikekar: So, Karan, as we discussed earlier on, there are a few clients in Europe as
well as in Americas, where we are actually in conversations of building long-
term large engagements. And of course, there are conversations in Asia as
well. So, we do believe that there will be some engagements that are going
to be fairly large to come. But we also think that from our existing clients we
have business that will grow. So, it's going to be a balanced growth across,
we just have to figure out the timing of it.

Kishor Patil: I mean, one thing we have said time again, that with the current clients, with
the current spend that have, we can double the revenues which we have. I
think these are basically -- which could happen normal in organic in the
normal course of business. Some of these are the opportunities on top of it.

Karan Uppal: And last question is with respect to fund raise. So, is management thought
process also in terms of diversifying the vertical, maybe looking at some of
the other verticals apart from auto? Is that also a thought process?

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Kishor Patil: I think we have mentioned that we –are currently looking at off-highway and
trucks as an additional verticals.

Moderator: Our next question is from the line of Aayush from B&K Securities.

Aayush: Congratulation on a good set of numbers. So just wanted to understand, sir,

one thing that if we see a commentary for the large deal pipeline and vendor
consolidation opportunity that you have out in your opening remarks. So why
are we like providing at the lower end of the guidance should be there
because if we see that we are having the vendor consolidation opportunities
in US, Europe, Asia and then also we are highly entrenched with the T21
clients.

So, what leads to the caution towards the lower end of the guidance? And
then what are we looking forward with the strategy T21 clients for the next
year, how they are shaping up their budgets or how they are seeing their
programs continuing with us?

Kishor Patil: So, I think we answered this question earlier, that even where we have won
the deals, some of the implementation has been delayed by a quarter or 2,
specifically European OEMs, we have one. And so, this being the year-end of
most of the OEMs, and you probably will see the results of European OEMs I
think for a quarter or 2, they may be very cautious.

Similarly, the situation is there. So that's why we are not sure when these
deals will actually realize, but as I said, these are serious conversations and
even some of the deals which we have won, we have not started. So, I think
in the medium term, we see good opportunities and we are confident about
good growth.

Aayush: Okay. Next question is on margins. So definitely, if we consider that if we do

even like the flattish margins for the next 2 quarters, we would be almost
20.7% -- 20.8% kind of figure for the EBITDA. So, are we like eyeing for 21%
plus for this year? Because like the wage hike is behind us. So, it will be giving
us a big lever going forward? And what is the furlough situation are we facing
that can access a headwind for the next 2 quarters?

Kishor Patil: I think two things. We don't give the quarterly guidance; we give the yearly
guidance. And I think we have been very clear about it. We, as a company, we
have continued to make investments and some of these adjacencies, some of
these growth opportunities, some of these large deals engagement, some of
the key programs we have taken, we continue to grow and many of those
expenses will be there. And that's why we have given what we see as a margin.
Also, the currency movements have been very crazy actually last few
quarters. So, I think with that, I think this is what we can see.

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Aayush: And just a last question on commercial vehicles. So, if I heard it clearly, as
you mentioned that 2026 will be the growth for the trucks. So, should we
expect the same kind of momentum that can kick in like what we have seen
in the passenger side of the vehicle part or will it be just a starting phase for
that trucks and after post 2026, it would be like a kicker phase for us?

Sachin Tikekar: We actually believe that some of the programs will start sometime in 2025
because they'll have to make -- it depends on from OEM to OEM, when they
have the new vehicle launches and what does that mean from -- when I said
growth is coming back, that means the number of vehicles being sold will
actually grow in '26 over '25. So, the build part from the OEM will actually
increase in 2026. However, they continue to make investments in different
technologies that are relevant to us. And those programs just start. The point
here has been -- we have been sharply focused on passenger cars all these
days. Even though we have had some business with commercial vehicles or
the truck makers.

Now we are actually for the last few quarters, we have been doubling down
on that very consciously. So, we believe just building that expertise and
understanding what their needs are, would lead to additional business for us.
And I think they need help in the areas where we have deep expertise. So, I
think the meeting of these 2 things will happen over the next few quarters.

Moderator: The next question is from the line of Rajit Aggarwal From Atharva Investment
Managers.

Rajit Aggarwal: This question is specific to the Volkswagen Groups and their strategy.
Recently, there were news reports that they have dropped their all electric
vehicle target for 2030 and have incorporated -- and have actually said that,
that target now includes hybrid vehicles as well. So, while you have addressed
the immediate headwinds for the next few months, do you think that
development itself...

Sachin Tikekar: Will you please repeat the last part of your question, you got cut off.

Rajit Aggarwal: Hello. Can you hear me?

Sachin Tikekar: Yes, yes. Just the last sentence, if you could repeat, please.

Rajit Aggarwal: So basically, I just wanted to understand the impact of Volkswagen's resetting
of their 2030 target on the overall spend vis-a-vis electric vehicles and our
engagement with them. In the medium term, does it impact our outlook of
our relationship with them?

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Sachin Tikekar: We believe that there are significant opportunities with the Volkswagen
Group. As you know, it's -- you looked at some of the announcements that
Volkswagen Group have made. They really need -- they are in the process of
reinventing themselves in many ways, given the impact that they have faced
in China and the competition that they're facing from China. And they are
reprioritizing some of their areas. They are also trying to consolidate their
efforts across the plan so that there could be substantial cost leverage that
can be taken. And we are part of some of those conversations, right?

So, in general, we think that as soon as that dust settles down, we'll have
significant opportunities coming from Volkswagen Group. Coming specifically
to powertrain part. You're right, I think like many OEMs -- some OEMs have
pushed out the battery electric vehicle program. However, some of them are
actually revisiting their hybrid programs, whether it's a mild hybrid for
markets or plug-in hybrid for the other markets. So, we believe that there will
be more alternate powertrain opportunities coming our way.

In fact, if you look at our results and some of the large engagements that we
have closed, there is quite a bit of a contribution from what we call propulsion
that covers different types of powertrain. So, we remain -- we believe that
going forward, the alternate powertrains will remain a significant part of our
business.

Rajit Aggarwal: So as of now, you do not see any negative impact on your outlook over the
next 2 to 3 years as far as that specific relationship is concerned?

Sachin Tikekar: Absolutely. I'm glad that you brought up over the next 2 to 3 years, we feel
very confident about growing that relationship.

Rajit Aggarwal: No, I'm always looking at 2 to 3 years, sir. I understand...

Sachin Tikekar: No, we remain very optimistic about our partnership.

Rajit Aggarwal: Wonderful. So next quick question on QORIX. Any thoughts or any guidance
on when do you see this becoming substantial and are these revenues from
our existing customers? Or are they -- or is there any new customer
onboarded with QORIX?

Kishor Patil : Well, first thing is QORIX revenue will not be consolidated in KPIT accounts.
So, it's just actually, the profit or loss from their operations, our share. And it
being a product company, which is investing into this initiative, we do not
expect big revenues in the near future and it has not been factored in
whatever guidance we give.

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However, as and when they build a new client, the services revenue of
integration will come directly to KPIT. So that is where we are looking at those
opportunities. We are in a very good position right now, and we believe it will
take time. I mean, when we actually announced also, I have mentioned that
it will take 12 to 18 months to come out with the main product.

Until that time, their revenues have started which are smaller in numbers.
Nevertheless, the client engagement has started, and we have started getting
the revenue, we mean QORIX has started getting revenue.

Moderator: The next question is from the line of Garvit Goyal from Nvest Analytics
Advisory LLP.

Garvit Goyal: My question is answered, sir.

Moderator: The next question is from the line of Sanjaya Satapathy.

Sanjaya Satapathy: Just quickly trying to reconfirm. So, you have said that you've cut down your
revenue guidance to the lower end because the mix is shifting towards
offshore, but at the same time, part of the margin benefit do you think that
you will be spending in your capability? Is that correct, sir?

Kishor Patil: So, first, we have not cut down our guidance. We have reiterated our guidance.
I've just given you a color on that, that it won't be at a high end because
people assume when we have given certain range, where it could be. And the
second is we have given the reason why it will be, and that is the reason I
said the margins will be better. But -- so earlier, we had expected a certain
margin. Our margins will be better.

So please understand we have given a guidance. Very few companies have

given -- I mean, it is about 2x or 3x of the next companies who have given the
guidance. And we are just saying that it will be at the lower end of the range
we have.

Sanjaya Satapathy: On the top line. But overall, on the bottom line, you are maintaining your
guidance, that is what you are saying?

Kishor Patil: Not only that we think the profitability is higher than what we have said. We
had given 20.5%, it will be higher.

Sanjaya Satapathy: Also, you have made a fair comment that not many people have given
guidance and not only KPIT has given guidance but have -- based on this
which made us still kind of feel that you will always beat it by a big margin.
That is only in which we have gotten used to.

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And sir, of course, you've given huge amount of clarification as to your fund
raising and what will be the deployment and considering the kind of cash you
have and the kind of money that you're looking at, it looks like it is going to
be a huge one, which will probably bring in its own set of challenges in terms
of integration and all that, and I'm sure the company is ready for that. And
then you are pretty close to the deal. Otherwise, you not have announced this
kind of fund raising. Is that correct? Because you have always been disciplined
about capital?

Kishor Patil: I will just comment that we have a reasonably successful history of
integration. We have grown every acquisition we have done and leveraged it
very appropriately or significantly because they all have been very strategic
acquisitions. And we expect that, and as I said, time frame, we cannot say,
but we are in certainly in active discussions.

Moderator: The next question is from the line of Chandramouli Muthiah from Goldman
Sachs.

Chandramouli Muthiah: First follow-up is just around, I think, over the past 2 to 3 years, we've given
long-term outlook that it's a really good industry to be in and you see sort of
longer-term 20% plus organic growth opportunity with 30, 25 clients that
you're working with. So just in the context of maybe the slight change in
macro environment, a little bit of geopolitical uncertainty. And also, maybe
slight delays in execution of some of these strong opportunities. Does that
sort of range of 20% plus organic growth opportunities has changed a little
bit over the near term?

Kishor Patil: I think those opportunities are there. In this case, I explained to you what we
see right now. But we do believe I have mentioned that we can be at least 2x
of our size of more with the current clients and the current focus we have.
So absolutely.

Chandramouli Muthiah: Got it. That's helpful. And just in terms of the company's long history of M&A
integration, I think that the largest transaction we've done has been Technica.
And I think we've executed pretty well on it over the past couple of years. So,
I just want to understand internally before you decide to allocate capital to a
particular asset. Are there any financial metrics in terms of minimum IRRs or
hurdle rates of return or payback periods that you keep in mind? And could
you just contrast what typical net margin you'd like an asset versus the
current yield on cash that you have?

Kishor Patil: So of course, we are extremely careful. I may say that there are significant
numbers of deals we have walked away from than what we engage. And the
reason is our careful diligence on that because it's a lot of effort. And while
the organic growth is strong, which basically in some way, you are investing

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into a larger initiative. So, 2, 3 things. First, we make sure that it is not a
margin dilutive in a certain period, maybe 12 to 18 months it is not a margin
dilutive. It's not dilutive on EBITDA, that's the first point.

Second, it is not EPS dilutive, that is the second part we look at. These are
the minimum things. Third, we look at cash conversion, which is very
important for us. And that we look at a fairly good return. The IRR, etcetera,
I mean, you know our return on capital has been very strong, and we continue
to drive it. I think if we drive the certain profitability and a certain growth, I
guess, that is how it comes. So, we ensure that those are some of the criteria
we look at.

Of course, the most important part is how critical it is for our clients, whether
it is on the top of our client's mind because that allows us to really get a
positioning premium and the growth. So that is very, very important, and it
should put us in the top 2 or 3 players in the world in that area. These are
very, very important for us. And this is what we drive.

Moderator: The next question is from the line of Ruchi Mukhija from ICICI Securities.

Ruchi Mukhija: I wanted to check the change in demand dynamics that you alluded earlier,
that it was concept through the quarter? Or it was more a quarter-end
phenomena?

Kishor Patil: Sorry, we couldn't understand your question. Could you please repeat?

Ruchi Mukhija: Yes. I want to check the change in demand dynamics that you alluded in your
commentary where we're experiencing offshoring and it indicates slight
slowness in the second half. Is this kind of demand scenario persist through
the quarter? Or it was more quarter-end conversation with the client? I'm
trying to assess whether KPIT managed to deliver 4.6% growth despite these
dynamics, or we started to see change in the client conversation more
towards the end of the quarter only?

Kishor Patil: I think the offshoring is, of course, we have started earlier because we had to
hire people, etcetera. But as the cost, as we mentioned that we have won a
lot of deals and the mix has changed specifically to ensure that we deliver on
the project in a lower cost to the client.

Moderator: The next question is from the line of Ankit Agrawal from Yellowstone Equity.

Ankit Agrawal: I had a quick question on QORIX. You had mentioned that you might add one
more partner to the JV, probably an OEM. So just wanted to see if there is an
update on that?

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Kishor Patil: So, first thing is we never said it would be an OEM actually. But yes, it will be
a very important partner, and we are in advance discussion. Absolutely.

Moderator: As there are no further questions, I would now like to hand the conference
over to the management for closing comments.

Sunil Phansalkar: So, thank you. Thank you for your participation in the call, and have a great
evening. If you still have some questions, please feel to write to me, and we
will be happy to get back to you. Thank you, and bye.

Kishor Patil: Thank you.

Sachin Tikekar: Thank you.

Moderator: On behalf of Dolat Capital, that concludes this conference. Thank you for
joining us, and you may now disconnect your lines.

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