KPIT Technologies Ltd (NSE: KPITTECH) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Sunil Phansalkar — Head of Investor Relations
Kishor Patil — Co-founder, Chief Executive Officer and Managing Director
Sachin Tikekar — President and Joint Managing Director
Priya Hardikar — Chief Financial Officer
Analysts:
Unidentified Participant
Rahul Jain — Analyst
Bhavik Mehta — Analyst
Karan Uppal — Analyst
Nitin Padmanabhan — Analyst
Aman Soni — Analyst
CA Garvit Goyal — Analyst
Vimal Jamnadas Gohil — Analyst
Chandramouli Muthiah — Analyst
Manik Taneja — Analyst
Keshav Karwa — Analyst
Sandeep Shah — Analyst
Mihir Manohar — Analyst
Abhishek Kumar — Analyst
Anand Bhaskaran — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to KPIT Technologies Q1FY26 earnings conference call hosted by Dallas Capitals Markets Private Limited. As a reminder all participants line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your phone. I now hand over the conference to Mr. Rahul Jain from Dollars Capital Market Private Limited. Thank you. And over to you sir.
Rahul Jain — Analyst
Thank you Moderator. Good evening everyone. On behalf of Dollars Capital I would like to thank KPIT Technologies Limited for giving us the opportunity to host this earnings call. And now I would like to hand the conference to Mr. Sunil Consulter who is VP, CFMG and head IR at KPIT to do the management introductions. Over to you Sunil.
Sunil Phansalkar — Head of Investor Relations
Thank you Rahul. A very warm welcome to everyone on the Q1FY26 earnings call of KPIT Technologies Limited. On the call today we have Mr. Kishore Patil, Co Founder, CEO and MD Mr. Sachin Dikekar, Co Founder and Joint MD Priya Hardikar, CFO and myself on the call as we do always. We’ll have the opening remarks by Mr. Kishore Patil on the quarter performance and the way forward. And then we’ll have this open for your questions. So thank you for joining this call and I will now hand this over to Mr. Kishore Patel.
Kishor Patil — Co-founder, Chief Executive Officer and Managing Director
Hello. Welcome to Quarterly Investor Call. I will just go through quickly the key highlights of the quarter. Year on year growth has been 12.8% in terms of rupee term 7 and 8% in terms of dollar term. EBITDA has grown year on year by 12.4%. We are very happy that in these uncertain times the EBITDA remains strong at 21%. EBIT at 17%. PAT is 171.91%. There is a variance as compared to the last quarter. Basically because of the one time income we had last time. This was because of the qualiform investment into Orix as well as certain 272 million rupees because of the because of the currency changes.
The wins during the quarter had been 241 million which has been across mainly in terms of powertrain and connected area both across USA and Europe largely in the Pascar. Basically in the Pascar vertical in terms of commercial there is certain drop and it is very specific to this year ramp down. It happened in a client which we Believe now will go into the growth mode from 1/4 down the line. In. Terms of overall quality of the revenue. Fixed price projects have moved from 60 to 62.5%. It is very important because this allows us moving to the business model and which we would like to move into in the future. The headcount has been 12,545 from 873 from the last quarter pipeline. Overall the pipeline remains strong. We believe that based on what we have won and the way the movement of the pipeline is appearing in last few weeks. Also some of the wins we had. I think we have this pipeline based on the Pascar but we believe the commercial there will be off highway and commercial also the growth which will kick in in the in next few quarters.
We are also very bullish about China and India. We can see that the pipeline from both these geographies have increased and you have seen basically announcement about the JSW engagement which we have won. I must say that we are very bullish about where we stand in terms of AI competency and the kind of solutions we are in the process of building. In terms of AI infused mobility. We. Believe based on our interactions with the clients as well as overall industry players, we are ahead in terms of our AI journey specific to mobility. And this gives us a very substantial competitive advantage in the in the next as compared to the competition to win more business. As you know overall, as you know, the geopolitical issue because of the tariffs and the intense competition between the OEMs and the China competition is still there, but we believe it will be settled down in a quarter and we believe that the solutions approach is what the clients are looking for to bring the speed and reduction of the cost.
We believe that along with our products and platform strategy and this AI based solutions, we will be in a position to have certain wins and H2 will be H2 will be higher than the H1 and as we move into the second half we will start gaining the growth momentum. This is what I have to say today and we look forward to any questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bhavik Mehta from GP Morgan. Please go ahead.
Bhavik Mehta
Hi. Thank you. Just one Question. Kishore, you mentioned that you expect the. Tariff related uncertainty to settle down in a quarter. Is this based on client conversation that you’re getting confidence that things will start improving from CQ onwards?
Kishor Patil
Yeah. I mean what we see in the newspapers and what you know and what we talk to government and understanding and of course the plan I believe by the in a quarter or so I think there will be more certainty. And right now we believe the because we have a very strong pipeline and I think the scale up is not happening because of the uncertainty or wherever there is a priority. The client is coming to us specifically when they really need a speed which is required for most of their completion of the program. But that comes at the cost of some kind of a cannibulation also of the existing business also.
So we believe that as that sets in, I think the spend will start happening and that is of course based on the client conversation as much as they see it right now.
Bhavik Mehta
Okay, thank you.
operator
Thank you. The next question is from the line of Karan Upal from Philip Capital India. Please go ahead.
Karan Uppal
Yeah, thanks for the opportunity. The first question is on the overall deals. So have you seen any pickup in terms of the projects which were stalled or delayed due to macro uncertainty in last few months and do you expect Q2 to stabilize or there could be some additional drop in revenue in Q2? Yeah, that’s the first question.
Kishor Patil
I think we I will tell you about the environment. We don’t talk about quarter to quarter and anything specific but I think in quarter one as well as quarter two the way we see is that if you remember last year we had some one time income which I mentioned also at the end of the year, last nine days many of that income had gone but I think it has been compensated by the new wins or some of this start of the projects. So already we see some of that. But I think they are not ramping up to our had not ramped up to our expectation in quarter one and quarter two.
But we do believe that in H2 sometime in the H2 it will start growing, it will start ramping up based on our conversations as I mentioned and the growth momentum we will see.
Karan Uppal
Okay. And can you please mention about the demand trends you are seeing across various geographical markets like Europe, Asia and US. And the recent US and Europe as. Well as US and Japan trade deals. Would that have any positive impact on the R and D spending as that brings some certainty with respect to tariffs on offer? Yes,
Kishor Patil
absolutely. I think there are some certainty is getting in. As you talked about Europe, US and we believe as it settles down, I think the clients, even though there will be an additional cost, I think at least there will be a certainty to some extent and that will probably push. We believe that will push them to really move forward in terms of certain programs and spend. There is still less clarity in terms of ARIFs in terms of Mexico and Canada, which is important to some clients, specifically in Asia, but also some places in Europe. And that is also required and I hope that also comes in this time that will further help.
But even today’s, you know, clarity is helping is what I feel. I think As I mentioned, H1 is something which is. Will remain a little unstable or uncertain to some extent as I have been talking. But we see now H2 certainly we believe that you will start seeing the growth in H2.
Karan Uppal
Okay, the last question is on the pipeline. So could you mention about the segments where you are seeing good demand in terms of let’s say hdv, adas, connected hybrid would be helpful. And last time you had mentioned two large deals were there in the pipeline in Europe. So what’s the status of that?
Kishor Patil
Yeah, I think overall the growth in terms of domain I think has been more in terms of power trend connected and autonomous though this quarter it doesn’t appear like that, but it will in one quarter down the line also you will start seeing that. But I think these are the areas and Europe we believe we are looking for some. There are many deals in the process, but I think in Europe some of these deals have started ramping up as I said, slowly than what we expect. But they have started converting. And the other thing I must say that as India and China we believe that they will start contributing meaningfully to our revenues in next six months or so.
I mean what you have seen some of one announcement today, it will start kicking in to certain extent from the next software. Even though it is initially it will be in the Q3. It will start but it will be small to begin with. But still it will start scaling up. It will be over next three years or so, so reasonable contracts and it will start scaling up. We also are very pleased that China pipeline is coming along well. We hope. And we are, we believe that we’ll be in a position to start some of these projects. Also Europe our pipeline is strongest as I have been talking about. I think that will help us and us I think specifically on off highway and commercial we see that we will start seeing some growth in the. In a quarter down the line.
Karan Uppal
Okay, thanks and all yours. Thank you.
operator
Thank you. The next question is from the line of Nitin Padmanabhan from Investec. Please go ahead.
Nitin Padmanabhan
Yeah, hi, good evening. I think it’s been pretty solid execution in a very tough quarter both on deal wins and margins. Wanted your thoughts on a couple of things. So first is I think we’ve had a lot of OEMs make a lot of announcements like I think Honda spoke about their change in plans on or at least pushing out plans from a EV timeline perspective and a lot of things. Daimler today there was a new guidance on lower volumes and so on and so forth. So there’s a lot happening. It’d be good if you could sort of contextualize what is happening from a spend priority perspective.
If you compare, you know, now versus last year on how they’re looking at those spends. So that is one second is I think, see we have seen a good almost 20% growth in deal wins, right. Both on a TTN basis and year on year basis. Now for the older deals, are you seeing versus what was originally signed? Is there any change in the scope or anything because of these change in plans? Are you seeing any impact or that continues to sort of hold true in terms of what the original scope and scale of those deals were? Those are the two questions to start with.
Sachin Tikekar
Nathan, let’s start with the first question. In terms of the spend, obviously there is a lot of prioritization, reprioritization that’s been done given the cost pressures that are being faced by all the OEMs across the globe. The basic thinking is they’re making investments in the features that make sense and that they have to bring into production immediately in order to remain competitive. And there are two specific. I think everybody for it’s becoming a default that everybody has a smart cockpit or an E cockpit. And secondly, it has level two plus autonomy. I think this has become the number one priority for most OEMs.
It has become a default in China and now it’s becoming a default in the Western world as well. So that’s one area where everybody’s prioritizing their spending. Along with that comes cybersecurity and functional safety. They go hand in hand. That’s the second part. But the third most important part is when you are putting these features into production, they require extensive validation. So we are seeing growing demand in terms of validation. These are the areas where the spend is growing. We believe that as someone mentioned earlier on, the electric power train is taking a little bit of a backseat.
At least the programs have been pushed out by many OEMs. Especially the ones outside of China. However, the hybrids have become prominent and in trucks and off highway there is also a talk of ice, some additional investment into internal combustion engines. So we are also seeing some demand coming up. So those are the areas in terms of technology, you know, in terms of the newer architecture, which was actually for the first generation of sdv, they’re all coming to fruition between now and next one year or so. And the next architecture was supposed to come into play by 2028 for that, the work would have started by now.
That’s definitely getting pushed out by a year or two. So these are the kind of changes that we are seeing in terms of preferences and prioritization for the OEMs. What was the second question? Sorry, if you could remind me.
Nitin Padmanabhan
Yeah, the second question was that our deal wins are up like almost 20% this quarter in even on a trailing 12 month basis. So if you look at the trailing 12 month deal wins, basically it suggests the order book is very solid. Now the question was on this order book which needs execution with all these changes that are happening, does this change the scope and size of those deals in your view, because of these reprioritizations and change. So in reality, would it still be a 20% increase on a TTM basis or that number would have come down because people have changed what they want to spend on.
Easy question. So from a visibility perspective, is it the same as what the number suggests, the visibility?
Sachin Tikekar
You’re right, the visibility continues to get better at the same time because of the. There are two reasons. There is. One is the reprioritization of existing programs that has had an impact. Even though there is growth, on one hand there is reprioritization in the existing programs. Right. Which is sort of not helped us. And the second part, also for the existing programs, there is a demand to do them in a more efficient, effective manner in terms of instead of providing the service, providing a solution that means using more of our tools and accelerators to speed up the program so that they can be launched faster. That means cannibalization in terms of some of our competitors, but at times our own business. So even though you’re seeing a lot of growth on one hand, these are the two factors that are sort of dampening that growth to some extent.
And we believe that that’s something that will happen less of in H2 of this financial year.
Kishor Patil
I think one thing I may want to add is if you look at the fixed price projects, they keep on going up. So we are now at 62.5 from 60% and this is very important because then we get the flexibility to deliver it in a multiple more efficient manner etc. And also change certain business models in the days to come. That has all helped us to maintain the profitability as well.
Nitin Padmanabhan
Got it, got it. That’s very helpful. Just one last one. If I can squeeze in the cannibalization in the business which you had explained. So we were always known for using tools, accelerators, having pre built code tested to be error free. So we were anyways doing it at the moment. Could you please explain how that cannibalization is working at the moment? What exactly is happening? We can just give a simple example.
Kishor Patil
Absolutely. I’ll give one example and I think see earlier we were doing a validation take an example. So right now as Mr. Tikekar mentioned it is area where most of the projects programs are in the process of validation. They are basically that’s what is happening now. Many OEMs are realizing that they are delayed and they have to catch up very quickly and have a better validation with a better quality but much quicker. Now for that we have brought in a very good solution in terms of AI driven validation. Now this is a big priority for the OEM.
So they have given us reasonable size orders prioritizing over other spend and they have won such kind of deals but in that case they have because they are not in a position to increase their spend they have to slow down or cut down spend somewhere else and that has also impacted. Did I answer your question?
Nitin Padmanabhan
That’s very helpful. Yes, yes, absolutely. Thank you so much and all the very best.
Sachin Tikekar
Thank you Nitin.
operator
Thank you. The next question is from the line of Aman Soni from Invest Analytics Advisories llp. Please go ahead.
Aman Soni
Hello, Am I audible?
Sachin Tikekar
Yes Simon, can you speak up a little bit?
Aman Soni
Yes. Good evening sir and congrats for the resilient performance despite a tough quarter. My first question is on this new tie up as KSW Motors first new energy vehicle is expected to reach the market in the second half. Can we assume that like you mentioned in the opening remark as well Q3 we will be starting the execution. So I want to understand like what is the size and scope of this contract? That is one. And is there any strategic correlation between KPIT’s recent entry into China and securing this partnership given that JSW Motors India’s operations involve a joint venture with a Chinese automotive company.
So that’s my first question sir.
Kishor Patil
We don’t like to comment on more details on the client project but I may Say that this is specific to India program and lot of work. We will be bringing in what assets we have and we will be adopting it more for India market. I think that’s what it is. This is will be about three years kind of a program. Many times the program which we will undertake is that I cannot talk about the numbers on this program.
Aman Soni
Correct. And secondly on this sodium ion battery test, considering the formal transfer of the technology to Trentor in February 25, could the management provide an update on the current progress of commercialization and manufacturing activities? And additionally, does KPIT maintain any transparent visibility or any direct involvement in Trentals battery production process?
Kishor Patil
So I mean at a high level I can only say that this is. It will take. I mean of course they are making the right investment. They have hired a CEO from Europe and moved him to India. And so significant investment in commercialization in order to go through two stages. Because battery is a very intricate kind of technology and the investments are pretty significant, but they are all committed to that. So if you look at both these things, I think it will take about two to three years for us to start getting the license revenue.
Till that time we expect the factory to be stable, the production to start coming and achieve a certain threshold from where our royalties kick in.
Aman Soni
So you just a follow up on that. You mentioned two, three years. But I remember in one of the interview management had mentioned like vehicle will be on the road based on sodium ion technology in India in a period of just one year. So what would that say?
Kishor Patil
I don’t know which interview you are talking about, but it could be a battery not manufactured through our technology or the db. It may be something else. I mean there are vehicles on the road even with hydrogen, but these are all pilots. And that kind of a thing happened because even with the sodium we have run some vehicles with the pilot production done in Europe, but those will be few of them.
Sachin Tikekar
These are not mass production yet. These are only pilot.
Aman Soni
And lastly on the any update on the codex side, whether we have made any addition in the terms of new clients?
Kishor Patil
I think there is one big European OEM which is in that process where we are in the advantage of engaging. We’ll probably know in next quarter or two.
Aman Soni
Got it. And just one more thing on the hydrogen fuel cells, what is the update on that technology part?
Kishor Patil
I think this is a piloting of this technology to get hydrogen at a high scale. It will take some time. So it’s. They are piloting it. I guess you might have seen also some PR also on this. It’s happening in multiple ways. I mean, apart from the coaching shipyard we did, I think we are doing in some other cases also some pilots. But it will take time to be commercially viable and revenue earning for us.
Aman Soni
Understood, sir. Thank you very much, sir. And all the best for the teacher. Thank you.
Sachin Tikekar
Thank you, Aman.
operator
Thank you. The next question is from the line of Ca Garvit Goel from NVID Analytics Advisory llc. Please go ahead.
CA Garvit Goyal
My questions are answered. Thank you.
Sachin Tikekar
Oh, thank you.
operator
Thank you. The next question is from the line of Bimal Yamnada Gohil from Alchemy Capital Management. Please go ahead.
Vimal Jamnadas Gohil
Yeah, thank you for the opportunity, sir, and congrats. Good quarter.
Kishor Patil
Thank you.
Vimal Jamnadas Gohil
We’ve been talking about making some inroads in China and now we have a very firm inroad in India as well. After this announcement, I just wanted could you just put some more light on the nature of work in these two geographies, especially China, is what kind of work are we doing? Is it very different from what we’ve been doing for clients across EU and us? What I mean is, are we directly entering the core architecture over there for the Chinese OEMs or are we looking at a partnership route to enter these OEMs? If you can explain more on that, please.
Thank you.
Kishor Patil
Currently in China we have at a high level, we are looking at all the three stakeholders. One is global OEMs in China which we are engaged our existing clients and you know, we are engaged some of our existing clients in China and we are now with a better presence, we are improving our engagement with them. The second thing, which is little different than because the ecosystem in China is very different. So we are working with some tier ones, Chinese tier ones specifically, to get a better understanding of innovation and technology which is coming in certain areas like digital, cockpit and autonomous and some of these.
So that is the second part. And there we are working with them in China as well as outside China. And the OEMs, we are engaging with them specifically through tier one in some cases, as I mentioned to you. And third thing is more outside China. So this is how we are working.
Sachin Tikekar
And just to add to Mr. Patil, we have certain products through our subsidiary Technica Engineering and we are seeing lot of traction for our products in Chinese OEM ecosystem. So there are five or six Chinese OEMs with whom we have already built a partnership for our products and we hope to enhance our reach to larger OEMs through the products.
Vimal Jamnadas Gohil
Right. Sir, my second question was on margins, given the kind of reset that we’ve seen with macro challenges and we are also looking at different avenues like off road commercial vehicles. How should we look at margins in light of the fact that we’ve been fairly confident in the past of expanding margins through offshoring and fungibility of our overall workforce. So if you can throw some light on the long term trajectory of margins after what has happened in the recent.
Kishor Patil
Past, right now I would say in foreseeable future we believe we can maintain the margins at 21%. I think as you have seen, I mean unless the currency plays very havoc. We don’t know that part. We don’t know but as long as it is in a reasonable way we should be in a position to maintain at 21% EBITDA. We do believe in the medium term we can increase the margin I have been seeing and it stabilizes in next few quarters or though we will talk about our strategy for future both for growth and the profitability Increase profitability.
Vimal Jamnadas Gohil
Understood sir, Helpful. Thank you so much and all the very best.
Kishor Patil
Thank you.
operator
Thank you. The next question is from the line of Chandra Moli Muthai from Goldman Snacks. Please go ahead.
Chandramouli Muthiah
Thank you for taking my questions. My first question is just on headcount planning for the year. So I think the last three years we’ve had between 15 and 30% sort of headcount addition in F22, 23, 24 and F25 was sort of a little bit of a reset here where it was flat. So just going forward this year with its back half recovery expected. Just want to understand how you’re looking at sort of headcount additions just given that I think this quarter we’ve had slight maybe net reduction in headcounts. Yeah.
Kishor Patil
Yeah. So I’ll answer this in two three ways. One is of course our growth has been slackish for last few quarters and maybe we are expecting another 1/4 of growth in that range. So looking at that, of course we manage our headcount based on how we see the next quarters. Right. And based on that what we have done is if you look at for last year we have our attrition is around 7% or so on annual basis. We have not, I mean at that range we have not changed, we have not added, you know, filled the bench as we generally would do.
So that’s where we are and naturally we have, we continue to hire ferocious, we continue to go to campus and get features because they are more, I would say AI amenable and ready and ready to learn more. So I think that we continue to do so right now that’s how we have done it. As we get more productivity, we are getting more productivity. As I said, we have moved to 62.5 in terms of fixed price significantly higher than the last year. If you look at and we believe we can go further more on this part.
So we will change our business model too and we believe we can get better productivity advantages on that. We will put this together. I must say, and I have been saying it from the last two quarters that I think the model where you know, you relate headcount to revenue will be difficult in future for and while we do expect that in some cases we will still do in short term, but I think over the period we believe that we will be in a position to enhance our productivity substantially and move towards more product and solutions.
And that has actually helped us during the last few quarters in terms of margins and we believe that our portion of that business will keep on going up.
Chandramouli Muthiah
Got it. That’s helpful.
Chandramouli Muthiah
My second question is just around I think the comments you’ve made on potential good momentum exiting the fiscal year back half to be better than the first half. So we have seen very stable and good level of deal wins over the past four quarters, even if you look at it on a yoy basis. So it looks like you are able to win business in this tough environment, but maybe conversion into revenue is taking slightly longer. So just want to understand as you look into the back half, maybe even if next quarter is slow recovery in the back half, do you see visibility in your pipeline or conversions for that sort of 5 to 6%, maybe higher than that kind of QOQ growth that you have done for almost 15, 16 straight quarters before FY25.
So I just want to understand what sort of trajectory you expect in the back half just given that your wins have been relatively strong in a relatively hard environment.
Kishor Patil
Yeah, yeah, yeah. So I think let me say that we will start walking before running. So that’s how I would put it. And I believe that as we first mentioned because of the uncertainties, I think the clients have do not have an extra budget so their priorities have changed. I think Mr. Tikekar also explained right where they are into production programs, they are changing towards most of the people have pushed down their new architecture programs by a year or two and they are trying to really make sure that they are in a position to deliver the current programs effectively with a better quality and add some features in the current program because they know that they are already behind and their current program specs are not good enough for them to win in the market.
So they want to add more features in that. I think that kind of changes in the priority basically they are moving the budgets to that extent and they are cutting or reducing their budgets or not spending more on the other parts. So that has really slowed down our. So as the certainty or I would say in the external environment comes in I think the OEMs will start spending and that’s when you will see the net realization of new wins and basically the growth will come back more.
Chandramouli Muthiah
Got it. That’s helpful. And my last question is just around chaosoft. So I think this is also something which you indicated might help you in the China offering to potential customers there. I think the mid quarter update you had indicated it’s something that’s nearing closure towards end of June, early July. So I just want to understand when we think we can close that and start consolidating the results from that asset.
Kishor Patil
Yeah, so we are in that process. We had certain, I would say conditions, CPs which are still not fulfilled. So we are waiting for that. We do hope in the, in this quarter it should happen. It’s not happening on the 1st of July that I can tell you. So we’ll see you know and we’ll, we’ll you know keep you informed as and when it happens.
Chandramouli Muthiah
Got it. Thank you very much and all the best.
Kishor Patil
Thank you.
operator
Thank you. The next question is from the line of Manik Taneja from Access Capital. Please go ahead.
Manik Taneja
I thank you for the opportunity. I recently had had some clarification questions regards to our segmental margins. If you could talk about what’s driving the quarterly volatility when it comes to segmenting margins, especially when it comes to the European markets as well as the robo geography. And the second question is over the course of last couple of years the two large events with Asian OEMs contributed to us to a significant part of our growth to Western 23 and 25. And when you spoke last quarter you were essentially expecting much more broad in FY26 given the way things stand and your commentary with these 4 years in India with NG and also your expectations on China.
If you could talk about how are you thinking about the broader contours of growth across the three markets Those would be my two questions.
Priya Hardikar
In terms of segmental margins I think if you look at it is basically recorded basis of entity financials. Those are getting converted at the currency rates that apply. And this quarter we have seen some changes alongside that as Mr. Patil mentioned, we have seen A significant change to fixed price based model and that is also driving the changes in the business model and thereby the margins that you can see in this segment.
Manik Taneja
Sorry, just to clarify on this, on this fixed price mode, is that translating into some near term pressure on margins in certain geographies wherein you are seeing this move and is this sudden certain geography specific move towards or engagement moving towards six fig?
Sachin Tikekar
Not really. I think our first step is to see it goes back to solving the client’s problems and making sure that we are meeting their priorities for that. If their expectation is that we’ll do things cheaper, better, faster for them. The first thing that we have to do is convert all the programs into fixed price so that we can actually apply our own tools, accelerators, also the AI infused solutions to do that. So I think this is the first step towards that, that it does impact the revenue but it doesn’t impact the margins. Right. To some extent as Mr.
Patil explained earlier on. So from that perspective there is not much of a difference that you’ve seen in the last quarter in terms of the, you know, you talked about the segmental margins across the three geographies. It hasn’t really impacted to that extent. I think your second question was about growth across the geographies. First, let’s talk about Asia. You know, as Mr. Patil explained, our investments in China, our investments in India will pay off. You know, as we get into the second half of the year and the next year we are seeing some of the larger engagement that we’ve been able to close.
They are from Europe and we believe that Europe will continue to drive our growth in future. Even though you’ve seen, you know, in the recent past, you know, for year on year there was a degrowth. But we believe that Europe will lead the growth for next several quarters to come. And in the US, as Mr. Patil explained, it’s not only the car OEMs that we are working for where we’ll see some growth coming, but it will be complemented by the growth that we’ll have from off highway and truck segments. These are early days again in the us These are all new clients and we are establishing those relationships at this point in time.
But over the next few quarters we’ll be seeing be able to see more growth. So net, net we see opportunities to grow in all three geographies. The timing of that will be different. But if you take, you know, next three to four quarter kind of view, we believe that there is potential growth.
Kishor Patil
Across the three geographies.
Manik Taneja
Sure. That appreciate the color and last question, essentially a clarification question with regards to beaches for the year. Typically we tend to do them in the second quarter. Any thoughts on what are you planning?
Sachin Tikekar
Can you repeat that? What was the part? Sorry, can you repeat that question?
Manik Taneja
So typically we tend to implement wage hikes in the second quarter. I just wanted to understand what. How are you thinking about wage hikes for the current year?
Kishor Patil
Yeah, so we are going to do that in a different way. We are basically, as we talked about, our business model and client expectation are changing. So we are looking at all our HR processes including hiring, training, appraisals and compensation. And we have also done the complete benchmarking with the new set of talent which we will compete henceforth. Not a normal talent which we have been competing with if at all in India market. So I think from that perspective we are realigning ourselves. For example, one example I’m giving you is our variable pay was less percentage as compared to the industry.
So we will introduce the variable pay more in line with the market. Similarly, we will create more incentives based on outcome in terms of productivity or AI adoption and hence the productivity. So we are making certain changes both in terms of the overall HR processes and that we should be in a position to do by end of Q2. And then we will basically do our, you know, roll out next quarter.
Manik Taneja
Thank you and appreciate the. Thank you.
Kishor Patil
Thank you.
operator
Thank you. The next question is from the line of Keshav Karwa from Bitcoin Investment Management Private Limited. Please go ahead.
Keshav Karwa
Yeah, thank you for the opportunity. So my question was what are the strategies that you have implemented in China market and as well as in India market and how are you seeing the demand shaping up in next, let’s say two to three years?
Kishor Patil
I mean in both the markets. In India market we are seeing reasonable traction actually. And we believe that we would like to make sure that we are dominantly, you know, present in different parts of the market and frankly also beyond business, we bring the best of the knowledge we have across the world to really build ecosystem in India which will help them in the long term for the industry to compete with the best in the global part. I think that’s what we intend to do. And of course it makes a lot of commercial sense and also growth.
It includes working with the established oem but also with the challenges which are coming in, specifically EV and new technology and like, I mean we have seen in JSW or some of these which will bring a new vehicle. I think some people mistook it for the Existing vehicle. So these new programs and et cetera. So we will basically bring it so new kind of vehicles and whether it is in passenger car or commercial or electric trucks, electric buses, electric cars and really establish India for India model across the ecosystem. That’s what we are trying to do and they are seeing a reasonable traction.
We are also working with the GCC, I must say select GCCs where we can really which are our global clients. And they believe that some of the programs they are implementing and many of them are looking at India. So they are working through their GCC sometimes in that case also we are making sure that we are working with them where we can add a differentiated value proposition based on our accelerators and reduce the time to market. I think these are the two cases in which we are working here. I just spoke about China. I think if you can just refer again, I think I elaborated that sometime back that we are how we are working with global OEMs tier 1 as well as Chinese OEM in China and outside.
Keshav Karwa
Okay, sir, thank you for answering your question.
Sachin Tikekar
Thank you. Sure.
operator
Thank you. The next question is from the line of Sandeep Shah from Iguire Securities. Please go ahead.
Sandeep Shah
Thanks for the opportunity and congrats on a great execution. Difficult back home. Sir, just one question. As some of your remarks implies that the contribution from India and China may go up in that scenario it may have some margin impact because margins in this country could be slightly lower versus company average.
Kishor Patil
I would encourage you not to assume that because I think as we talked about we are changing the business model, trying to do it in a different way, bring using different areas. And over the time we will also talk about how we are building the platforms and products which could become the significant part of our business. I think we are using some of these in these markets to maintain our margin.
Sandeep Shah
Okay, thanks. This is fair enough. And just last thing in terms of for the exports to happen in China, the invoicing can happen in dollar or in the local currency.
Priya Hardikar
It can happen in local currency as well as in dollars. It depends on the engagement, client engagement. There are no restrictions from the legal side here.
Sandeep Shah
Okay. Because the local currency may have a currency volatility. But I do agree it’s a small percentage to the overall revenue.
Priya Hardikar
Now you should also note that we already have a subsidiary in China and that actually does the transaction with our client which is a local China currency.
Kishor Patil
And the costs are also in China.
Sandeep Shah
Fair enough. Thanks. And all the rest.
Sachin Tikekar
Thank you, Sandeep.
operator
Thank you. The next question is from the line Of M. Manohar from Caroline Asset Management. Please go ahead.
Mihir Manohar
Yeah, hi. Thanks for giving the opportunity and congratulations on good execution in a difficult environment. Yes. If I wanted to understand on your China and India pipeline, I mean so how large or how material are this pipeline as of now? I mean they don’t contribute much to the business. I mean would it be sufficient for us to offset the slowdown which is there in Europe and the rest part of the piece. Just wanted to get some color on that. And how would be the billing rates here? I mean from the limit we versus what we generally need to robust clients.
Kishor Patil
I encourage you to just look at just now that how the margins will keep. The model is not about tnn. Model is not about the bill rates. It is about the overall solution, how we charge the platforms and the products and then the of course AI infused mobility solutions. So these are the changes in the model we are bringing. Of course we do a normal business also but with all that we are comfortable with the margins we can maintain. I will not give any specific numbers but I can tell you that in two years this will be a three digit number in terms of India, China together.
Mihir Manohar
Second question was on the European release back to back profit cuts also talks of building of models. Does it structurally face a challenge for us for the 3 to 5% of growth that we as a player and as an industry we used to have? Does it face a challenge to that or should we see third quarter for us being once again back to the range of 3 to 5% growth that we used to have?
Kishor Patil
I’ll not give a quarter wise answer and I mentioned this that first we have to start walking. I think the world is stabilizing, I think we have to look at that. But we have a very strong pipeline and we said that the momentum will come at the end of the H2 for sure. How much how it really feels the world. Nobody, neither you neither I can predict. But I think we have sufficient pipeline to accelerate once things settle down.
Mihir Manohar
Sure, understood. Just lastly on your products and platforms, I mean you’re trying to pivot the business model some two to three key products and platforms, some color around that, you know, how are you going to monetize it? What are these products and platforms exactly? What is the strategy around that would really help.
Kishor Patil
Right now we can talk only about something specific but we’ll lay down our strategy overall etc. In next couple of quarters. The as you know we as a technica we have a range of products and we have been building the products which Are tools mainly for validation and you know, and those kind of products also the network basically products for the vehicles. And this is one thing which we have been selling to all the OEMs, including where we are not, I mean the best of the OEMs in the world. So both American as well as Chinese.
So I think and of course European. So I think these are the products. And also there are a few other products which I mean co, you know, it’s jv but you know, the co. So similarly we are looking at a broader strategy in terms of production platform which will annual in the due course of time.
Mihir Manohar
Understood. And just Last question was FR24, FY25 what was the pressure addition pressure hygiene in SR24 and SR25?
Kishor Patil
I think we do not talk about these numbers, but these are in three digits number. And we continue to. As long as they pass our criteria of doing the education and passing our trip, then we do hire them. So that’s what I can say right now.
Mihir Manohar
Understood. That’s it. From I said thank you very much.
Sachin Tikekar
Thank you.
operator
Thank you. The next question is from the line of Abhishek Kumar from JM Financial limited. Please go ahead.
Abhishek Kumar
Yeah, hi, first question is on tcb. You guys mentioned in the mid quarter update that you know, a lot of your dealings now are cannibalizing your own revenue. So in that context, how should we look at this $240 million number? Because this is a gross number from what I understand it might have cannibalized some of the revenue that you’re already doing. So maybe two part question one, if you can just tell us what would be the net number, ballpark or another way, do you think we need to win more to actually get the same effect as we would have got if we had one to $40 million maybe a year back?
Sachin Tikekar
Abhishek, there is no doubt that we need to continue to win more because there are tremendous headwinds. And there are three factors. One is last year we had substantial one time revenues that were licensed. Second is we also talked about through the different business models in order to help our clients how we are at times not only cannibalizing the market share of our competitors, but sometimes our own market share. And the third factor is the reprioritization of the programs. And that remains fluid for now till the time the uncertainty exists in the minds of the OEMs.
And our hope is that things will settle down over the next one or two quarters. After that we’ll be able to have more clarity in terms of what that means the tcv. Just so you know, the TCV value is actually over a period of time. And secondly the TCV also the start of the program also depends on the ability of the OEM to accelerate growth. We’ll see more results coming out of the OEMs in the next one or two weeks and we’ll have to see the trend hasn’t been good for the last couple of quarters for them and we need to keep that in mind.
We always take a long term view of these partnerships and through this difficult time we are going to be their trusted partners. But we do believe that things will stabilize in another quarter or two and then we can go back to our growing wage. That’s the best to the extent that we can answer your question at this point in time.
Abhishek Kumar
Thanks. And one quick last question from my side, especially on Japan, the growth in JPY currency seems like a sharp decline, I think despite cross currency benefit. So while we understand this was a difficult quarter, but as we look ahead, do you think this was just a pause in the program with some of the OEMs there or there has been a strategic rethink and therefore we will have to wait and see how this panel.
Sachin Tikekar
So I think that’s a really good question about Japan. We have had tremendous growth over the last couple of years because of our engagement in Japan and that was on the back of largely one oem. And the thing that we are doing is there are three other OEMs with whom we have started really advanced conversations and we believe that towards the end of the year we’ll start working with them as well and we’ll have more broad based growth coming from at least four OEMs in Japan by the end of the year. So you know what you’ve seen maybe for now is a glitch.
It may continue for another quarter or two. But as we get towards the end of this financial year, we’ll have broad based consistent growth coming out of Japan.
Abhishek Kumar
Thank you. And all the best.
Sachin Tikekar
Thank you.
operator
Thank you. The next question is from the line of Anand Bhaskaran from KCM Wealth Management. Please go ahead.
Anand Bhaskaran
Yeah, good evening. Can you hear me?
Sachin Tikekar
Yes, Anand.
Anand Bhaskaran
Yes. That’s a good set of numbers. I just wanted to know your. Just to get a perspective of the hiring process now. I guess you know how like many company owners are basically saying that they will completely change the hiring process from counting the number of employees to actually sourcing the. What is it getting focusing on output revenue rather than revenue per employee. So what one your Company like you know, adopt going forward basically do you think we will focus on employee count or will you look at the gig economy and then say okay, we will hire employees from time to time and focus on their output instead.
Kishor Patil
Two, three things, you know, number one, we of course are looking at changing the quality of our employees, which is good and we are investing quite a lot in training and improving their competencies both in domain as well as on AI side. AI, you know, understanding of AI and having that mindset is very important to us. So we do believe that sometimes of pressures can do a good job. So we intend we continue to hire them. Basically our criteria of skills and the competency has changed both for freshers as well as lateral in terms of gig economy.
It’s not still as much as prevalent in India. We would like to try that but it really happens more as a subcontractor and some individual players. It’s not as mature market in India yet for that. So we can do it in bits and pieces. But I must tell you that in other way we do believe that interns and pressures are really contributing very well in terms of our AI strategies. So as I mentioned we are looking at the whole HR process in view of the changes in the technology as well as what the clients are expecting.
Anand Bhaskaran
Okay, so like do you see any significant like say employee crowd downs and then because you heard like many IT companies are, you know, laying off a lot of our employees as well compactly and probably focusing on more contractual employment. So you think that in your case also that that’s one thing is we.
Kishor Patil
Are a bit bit different than IT and, and the second thing is we are looking at changing the business model more. And if you see KPIT last three years revenue per person has increased and we do hope that the changes will help us to continue to maintain that.
Anand Bhaskaran
Okay, okay. And one last question is like you have any guidance for the next two, three years in terms of revenue growth?
Kishor Patil
I think this is, I mean I had said it but right now I think we’ll come back when we are not talked about this year and we’ll not talk about this year and we’ll come back when we believe the markets are a bit stable.
Anand Bhaskaran
Okay, thank you.
Sachin Tikekar
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference over to management for closing comments.
Sachin Tikekar
So thank you everyone for your active participation on the call and have a great evening ahead. Thank you and bye bye.
Kishor Patil
Thank you.
operator
Thank you on behalf of Daulat Capital Market Privates Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.