Debasis Mohapatra
Bengaluru, 4 September 2024
Engineering services firm KPIT Technologies, which specialises in the automotive space, will enhance its focus on China with increased investments in the coming quarters.
In the analyst call post Q1FY25 earning announcement, the management of the Pune-headquartered ER&D player said that it would not only help the Chinese clients to leverage its connected services but also enable its global clients to expand their presence in the world’s second-largest economy.
“We continue to bring focus on China operations. We are looking at a few areas in China. One is, what we can do for Chinese OEMs and how we can do it for them? We do have a small presence in China for many years, but now we are strengthening that presence and we are bringing certain products and technologies to these OEMs, which are unique and for them, are required for their next phase of the journey,” Kishor Patil, CEO & MD of KPIT Technologies told the analysts.
“We are also trying to bring out offerings for them, that they would require for being global companies. Naturally, we are also helping our global clients to scale in China. So, with all these, we would like to bring more focus on China. We are also making investments in China,” he added.
According to the company, its growth in the first quarter (April-June) of the current financial year was driven by Asia, which grew strongly. While growth momentum in Europe continued, the US saw a muted growth. The company, however, said the US momentum would come back in some time.
“Many global OEMs are looking at the USA as a market and that’s where their spending would increase and we would have a role to play and USA market will grow in that direction. Overall, in the adjacencies we talked about, there are many dominant US clients. So, we believe that the USA growth will in due course come back,” Patil said during analyst call.
In Q1 of FY25, KPIT clocked a total revenue of $165 million, around 25% rise in constant currency term over the previous fiscal year. While it drew a revenue of $46.7 million from the US, Europe contributed around $85 million during this period. Asia contributed a top line of $33.5 million during this period. KPIT remains the fastest growing ER&D player in the Indian engineering services space.
