Home AUTO TECHNOLOGY KPIT Tech back on exchanges, scrip races to ₹105, Auto News, ET...

KPIT Tech back on exchanges, scrip races to ₹105, Auto News, ET Auto

Bengaluru: KPIT Technologies re-listed on BSE and NSE on Monday after the completion of merger and demerger with Birlasoft, part of the $2-billion diversified CK Birla Group. Shares of KPIT Technologies ran up 5% to Rs 105 apiece on the first day of trading on the BSE.

The KPIT’s engineering business, currently pegged at $270 million, will focus on automotive and mobility solutions with embedded software, digital technologies and applications. After the threestep deal, the Birlasoft-KPIT’s IT business combine would be a $500-million entity focusing on manufacturing, ERP, application development and maintenance and infrastructure management services.

Kishor Patil, co-founder and CEO of KPIT Technologies, said, “We are at a reasonable size to stand on our own and grow. We are optimistic about the business outlook and expect to grow at 20% every year for the next three years.”

Patil is confident of the company’s operating margins expanding to 18% by the end of first year of operations. Some firms have engineering services in their DNA, while others have attempted to unlock an additional revenue stream from it to offset the risk of lower spends and thinning margins in their traditional areas like application development & maintenance.

In the automotive space, KPIT is betting big on five growth areas — autonomous, electrification, connected, standardization and digital services for shared mobility solutions. Patil said these areas are attracting huge investments as governments have instituted emission standards to regulate vehicle emissions.

Automotive is one of the fastest-growing verticals for KPIT that contributed 50% to its revenue driven by newer OEMs, ecosystem partnerships and it has capabilities in areas like ADAS, connected vehicle and powertrain technologies. Globally, Alten and AKKA specialise in the automotive and aeronautics sectors. Bertrandt is a German specialist for the automotive industry that has revenue of over $1 billion.

KPIT counts BMW and Panasonic as customers. More recently, BMW partnered KPIT to roll out the software stack within the autonomous driving platform to third parties that would make it easier to integrate other OEMs and begin offering scalable software solutions across the industry.

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