KPIT Technologies Ltd (NSE: KPITTECH) Q3 2025 Earnings Call dated Jan. 29, 2025
Corporate Participants:
Sunil Phansalkar — Vice President and Head Investor Relations
Kishor Patil — Co-founder, CEO and Managing Director
Sachin Tikekar — Joint Managing Director
Anup Sable — Chief Technology Officer and Board Member
Analysts:
Rahul Jain — Analyst
Bhavik Mehta — Analyst
Garvit Goyal — Analyst
Karan Uppal — Analyst
Jinesh Shah — Analyst
Nitin Padmanabhan — Analyst
Pranav Vasa — Analyst
Ruchi Mukhija — Analyst
Abhishek Kumar — Analyst
Chandramouli Muthiah — Analyst
Bharat Shah — Analyst
Mihir Manohar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of KPIT hosted by Dolat Capital Markets Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to 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 touchstone phone. 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 — Analyst
Thank you. Thank you,. Good evening, everyone. On behalf of Dolat Capital, I would like to thank KPIT Technologies Limited for giving us the opportunity to host the earnings call. And now I would like to hand the conference over to Mr Sunil Fansalkar, who is Vice-President of CFNG and Head of IR at KPIT to do the management introductions. Over to you.
Sunil Phansalkar — Vice President and Head Investor Relations
Thank you, Rahul. Hello all. Good evening and a warm welcome to the earnings conference call for Q3 FY ’25 of KPIT Technologies Limited. I hope all of you have had a great start to the new year and continue to have so for the remainder of the year.
On the call today, we have Mr Kishor Patil, Co-Founder, CEO and MD; Mr Sachin Tikekar, Co-Founder and Joint MD; Mr Anup Sable, CTO and Board member; and Mr Spriya Hardikar, CFO; and Sunil from Investor Relations. As we do always, we’ll have the opening remarks by Mr Kishor Patil on the performance of the company and the way forward and then we’ll have it open for questions.
So now I will hand this over to Mr Kishor Patil.
Kishor Patil — Co-founder, CEO and Managing Director
Good evening, everyone. Very happy to take you through the results for quarter-ending December ’24. At a high-level, first, we would be maintain — maintain reiterate our guidance for the revenue we had given at the beginning of the year between 18% to 22%. The — we have raised our EBITDA outlook from 20.5% to 21% plus and that is reflected also in the EBITDA margin for this quarter. Overall on year-to-date quarter three FY ’25 revenue grows 20.7% over the last year Q3 ’25 YTD revenue. FY ’22, similarly, YTD Q3 FY ’25 profit growth is 38% over the same-period last year.
For this specific quarter, revenue grew 17.4% CC, 18.1% year-on-year. EBITDA is 21% — 21.1% versus 20.8% last year. Year-on-year, there is a growth of 20.4% in terms of profits. Quarter-on-quarter, there is a growth of 2% in constant-currency and 1.7% in reported revenue. Overall, the growth has been no largely during this period is driven by Asia, but we’ll explain a little more on this. The overall deal wins have been INR236 million during the quarter, largely driven by — I mean, they are quite balanced, driven more by Europe and followed by US and Asia.
The cash for the quarter is INR9.68 billion, it has increased from INR9.66 billion last quarter to INR14.2 billion this quarter. This is a significant cash generation during the quarter. It’s an exceptional one. Our DSO is 42 days, which we expect we typically hire about 45 days. So significant cash generation during the quarter. We have the interim dividend of INR2.5 rupees per share as compared to INR2.1 per share last year.
The overall growth during this quarter or this close is driven by Asia, powertrain and connected vehicles. Now the revenue mix has really improved and the base — mainly our productivity continued to improve. As you might have seen year-on-year, there is per person productivity per person, revenue per person contribution has gone up. As compared to in terms of people side, our attrition continued to remain the lowest. It is about half of most of the average industry attrition. And there is a substantial investment we continue to make in people basically make them AI readiness and as well as improving the competency of our team.
The — in terms of technology, the two top areas for us continue to be AI and cyber security for the investment along with our continued investment in the normal practices. Looking-forward for the next year, overall, we see a very positive conversations with the clients, and our pipeline has is significantly increased during this year. We do not report any specific numbers, but I may say that it has gone up by about 20% plus during this quarter. The pipeline has increased. It is increased mainly on account of two things. One is couple of large deals, a significant deals and a multiple broad-based clients. We have a very positive conversation going on with eight new clients, which we have been pursuing and they — that has continued — that has resulted into a broad-based pipeline for KPIT.
It is across the vertical. I mean PASCA — it is of course led by PASCAR, but there is a meaningful pipeline in off-highway commercial semicon for automotive. And this is mainly driven by two things. One is many of large clients, OEMs, which includes existing as well as the new one, some of them has come out of consolidation of partners they have where they are looking at effective, quick implementation of SDB and where they — thereby see you know natural orientation to come to KPIT.
And the second part is some of these new companies which we are talking about, who are mainly an off-highway commercial semicon companies who are trying to — who are coming — who need different kind of solutions for the mobility in terms of largely driven by the architectural changes and SDV. So these are some of the reasons why the pipeline has gone up. It is fairly balanced between the geographies as well.
So looking at the other part on terms of another big change which happened in during the quarter is about the US. There are many changes which are happening. All-in all, we see that there is a in some way we see the positive moment all-in all, while some of the incentives on EV are no more but what it means is basically they have given more options to the end-consumer. And considering the fact that the consumers have a preference for electric vehicles, including, as you know, the Tesla, which is a US company. And there is a significant segment who prefers EV. Naturally, it means also that the OEMs will look for alternate solutions, which means hybrid, which means fuel-cell and also strengthening up their conventional programs. I think that means that there are multiple opportunities for us to engage with the OEMs.
We do not see any significant challenges in terms of visa, etc., basically because we believe it is about the talent and not about the immigration, the issue is. And so we believe that there will be a continued mobility for short-term projects as did it, whether it is H1 or L1 or any other mode, it doesn’t matter. We are well-prepared for continuing to increase our local presence as well. We believe that the people productivity is a major focus for us. AI investments will continue to make and we will improve the productivity per person as we continue to do it.
On the M&A side on M&A side, we are looking at — we continue to engage with few companies and — but looking at their sizes and what we see currently, we do not see that we will offer QIP as we have a — in the short-term. So we believe some of these acquisitions we will do through internal accruals on the basis of strong cash-flow and borrowing. And we will not opt for QIP at this point of time. Thank you. We can now have it open for questions, please.
Questions and Answers:
Operator
Thank you. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press time one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 JPMorgan. Please go-ahead.
Bhavik Mehta
Hi, thank you. So a couple of questions. Firstly, obviously we are or in auto sales, but based on your planned conversations, is is between US and Europe or between the two. I know does well, but between US and Europe, where do you see the recovery happening at a faster? That’s question number-one. The second is…
Kishor Patil
I couldn’t hear you clearly breaking little bit. Voice was breaking a bit.
Bhavik Mehta
Is it better?
Kishor Patil
Yes. Yes. Yes.
Bhavik Mehta
So I was asking that obviously, we have seen a slowdown in global auto volumes and obviously, the recovery will take some time, but between US and Europe, where do you see the demand from clients coming back or sooner than later based on your client conversations? That’s question number-one.
He second question is, or as OEMs move from EVs to hybrids or other alternative options, how does that impact the kind of work KPID does with OEMs? Do we see any headwinds on our revenues because of that movement from EVs to, let’s say, hybrid offer.
Sachin Tikekar
So let me answer the first question first. The way I understood the question was where-is the demand coming from? Is recovery faster yeah, where we see recovery from our perspective, given the sluggishness in the total volume of the vehicles being sold. So as Mr mentioned earlier, it’s led by Europe, followed closely by Americas and Asia. So it’s a balanced sort of demand-generation that we have created in terms of the geographies. And in terms of also, if you were to look at the breakup of the subverticals, it’s obviously it’s led by passenger cars and followed by trucks and there are meaningful conversations with the highway OEMs. Primarily highway and truck OEMs are from Europe and the US. So I hope that answers your first question.
And the second question was, you know sort of alternate propulsions. It’s not just going to be battery-electric vehicles, but there are other options that we have to make available. And what does that mean to KPIT? It’s a great opportunity for KPIT. A, we do a lot of the work-in the battery-electric and we think that will continue because there is still demand across the world for battery-electric vehicles, including the US. And the other part is actually the hybrid and we think that in specific countries many OEMs will actually have to focus on not only plug-in hybrid, but also the mild hybrid solutions. So that creates an opportunity because you know we are servicing some of the clients in the hybrid space as well.
And there is from — especially from off-highway and truck perspective, there is thinking towards a next-generation of conventional powertrain engines as well. So that creates an opportunity because that’s the core of KPIT, historically speaking. So we think that it’s a very positive thing for us, not only in — necessarily in the US, but we also see similar trends in-markets like Japan, potentially in India as well and some of the other markets across the globe. So we really believe that it’s a very good opportunity for our company.
Kishor Patil
I wanted to add a different — one different dimension. I think somehow people let all the expenses with EV, while that opportunity exists as Mr mentioned. So the SDV, as you look at it, it is much beyond EV in that sense. And if you actually ask me, the largest growth will be driven by for us in terms of digital cockpit and autonomous in the next few years. So while we will continue to grow, as we mentioned, I just wanted to reiterate this basically because I think many times it is misunderstood that it’s driven by only the EV part. Does that answer your question?
Bhavik Mehta
Yes, that’s. Thank you.
Kishor Patil
Thank you.
Operator
The next question is from the line of Garvit Goyal from Invest Analytics Advisory LLP. Please go-ahead.
Garvit Goyal
Hi, am I audible, sir?
Kishor Patil
Yes.
Garvit Goyal
Good evening, sir. Congrats for a decent set of numbers. My first question is on, like we are observing few developments there happening when we visit your social media platform, particularly on the human resource side, like teams of Pune and Bangalore are meeting along with the new hirings happening. So can you put some light on where are we right now? And by when we can expect revenue to start kicking-in book, sir? So that is my first question.
Sachin Tikekar
So actually, I may just say that we are quite on-track. The team are already in-place and to some extent, we are building this solution for a much broader base. We have — last-time I mentioned that we have open sourced some part of it as a part of consortium for Europe. We have got one significant OEM as a client for and we are also in advance engagement with one European OEM. And also our discussions about a third partner including in the OEM is in advanced-stage. So this is what I may say. Andred, you want to add anything, sir?
Kishor Patil
So I think this is where we are on the.
Garvit Goyal
And do we expect anything in revenue to contribute in FY ’26 in KPIT’s books.
Kishor Patil
So I may say that it continues — it continues to contribute in some way right now, but I’m sure when it will be a contributor for the next year.
Garvit Goyal
Understood, sir. And sir, like in continuation to question of previous participant, you mentioned SDV is much beyond the EV. So can you please further elaborate on it like how — like you also mentioned you are doing it for one of your hybrid customers. So can you please put some more color on it, like how it can be like note a degrowing factor, the change in the terms policy is happening that is not going to affect us.
Sachin Tikekar
So let me — I think what Mr. Partil was trying to say is not all vehicle programs are just necessarily about battery-electric vehicle or propulsions. The priorities for the OEMs are also in the areas of e-cockpit, which is basically consumer experience. I think there is lot of high spend in e-corporate and consumer experience. That’s point number-one. Point number two, cybersecurity is also becoming important. And thirdly, the autonomous driving level two to level three is also important. So again, there is investment. So I think what Mr Patil was trying to say is the spend is not just about alternate propulsions, there are other areas where OEMs are making investments and those also create opportunities for us. And let me have Anub contribute to that to what I just said.
Anup Sable
If you — if you look at in the past, how OEMs worked was primarily sourcing electronic components, which obviously, when you talk about electronics, there is software in it. So sourcing that and integrating the electronic software components into their vehicles. STV is an initiative for right reasons to actually make sure that most of the software is actually driven by the OEM, controlled by the OEM, owned by the OEM. And as a result, the OEMs program, which was largely a integration program of maybe 20 subsystems supplied by the Tier-1s is coming down to actually developing software for all these subsystems. So whether it is cockpit, whether it is chassis, whether it is body, whether it is autonomous vehicle and many more and that actually drives you know, different architectures in you know, so significant amount of work-in terms of making that happen in terms of change of architecture and writing more software on-top of their architecture.
So I think when you talk about SDV, we are talking about much more than e-powertrain. There could be a non-electric powertrain SDV also because fundamentally what the OEM want to do in the future is get closer to the customer and most of the customer journey or customer experience enhancement is happening through software now.
Garvit Goyal
Got it. Thanks for nice explanation. My next question is on the deal pipeline, like with pipeline showing a strong improvement both year-on-year and quarter-on-quarter. So how do you see this trend shaping up in the upcoming quarters? Like what is the future prospect in terms of the pipeline and in terms of the deals?
Sachin Tikekar
So what we can say at this point in time, there are two things. One is, we are very happy to see that there are — there is significant improvement in terms of the deal closures that we have actually reported. It’s not just the deal closures during this quarter, but also the pipeline buildup for potential closures in Q4, but more importantly, the closures in the first-half of next financial year. And as Mr Partil explained, we believe that there are opportunities for us to continue to grow so across the three geographies and also across the three sub-verticals. And the fourth part, if we can add beyond the three sub-verticals, passenger cars, trucks and off-highway vehicle is what we can actually do with semiconductor companies to create much greater value for the OEMs. So that’s — there is another angle where I mean together we can make a much bigger impact on some of the OEMs. So net-net, right now we are very happy to see the progress that we’ve made in Q3. And we expect the trend to continue in the near-future.
Garvit Goyal
Okay. Got it, sir. And one small request, sir. Like we were looking to visit your facilities in Mumbai and we tried reaching via investor desk on the email address, which you are sharing with us in PPT. Further, we also called on the contact number followed by a mail to the investor, but no one is responding, sir. So kindly is looking to it whether there is some internal issue or what.
Sachin Tikekar
So please write an email to at and I’ll get back to you.
Garvit Goyal
We have written on this email address only.
Sachin Tikekar
We forward it to me and I’ll get back to you.
Garvit Goyal
Okay, sir. Thank you, sir. Thank you very much.
Operator
Thank you. Thank you. Thank you. The next question is from the line of Karan Uppal from PhillipCapital India. Please go-ahead.
Karan Uppal
Yeah. Thanks for the opportunity. The first question is on the Honda — a potential Honda Nissan merger. So do you foresee any risk to the existing work which you’re doing for Honda, which may impact the growth for FY ’26? That’s the first question.
Sachin Tikekar
So as you know, what is in the press is they are getting into — they are working towards creating an agreement over the next couple of quarters and all going well, they will create one common entity where the two companies will get merged. And that’s something that they will do in the next year. Honda is one of most important clients and for Honda, we are one of the most critical partners in their SDB and beyond SDB journey. And we actually look at this as a greater opportunity, not only from the work that we are doing for Honda, many of the things that we are doing for Honda where Honda is leading the way. So we believe that if all of this goes through, there could be opportunities for us to bring the Nissan part of the partnership also up to speed with what has been done.
Having said that, we also think that there are opportunities related to overall cost-reduction in the vehicles, both on the Honda side as well as the Nissan side. That will actually become very critical. That’s one of the reasons why they’re actually coming together is to leverage the combined volume and improve profitability and the impact. So from our perspective, we believe that this is a very positive thing from KPIT’s perspective. It’s too early to say because I think there is a very clear roadmap that they have rolled-out and will go, you know, as things start to materialize on that front. And on-top of that, I think we are in conversation with both the OEMs outside of this potential partnership. So, yeah, net-net, I think it’s a very positive thing from KPIT’s lens.
Karan Uppal
Okay. Okay. So no impact as such you are seeing at this point of time from this potential merger. Hopefully in a positive way. Okay. Okay, great. The second question is on the pipeline. So very bullish commentary on the pipeline side. But last-time you mentioned that the timing of deal conversions were a bit uncertain. So have we seen improvement in pipeline to deal conversion? And second question related to that is any large SDB related deal you are seeing in the pipeline?
Kishor Patil
So first thing is we have a — we have seen the good convergence during the quarter. So we do hope that there are more positive convergence on but positive conversations. But during the quarter, we have seen a very strong convergence, specifically being the last quarter of the year. So of course, I mentioned that there are few larger opportunities in our pipeline and also — but the more better thing I would say is it is across three verticals, across geos and across — and it includes more clients as we are adding off-highway and commercial to Corey as well as new passenger car vehicles of OEM where we have not engaged till now. So it’s a broader set of clients and it is a cross-border set of verticals.
Sachin Tikekar
What I would just add to what Mr Partil said is in reference to your specific comments in regards to SDV, most of the partnerships that we have announced in the recent past were related to SDV. Going-forward, that would be the case, but it would be much beyond that. As Mr Sable explained that there are different parts. So there are — there is the SDB part and the variance of that. The second part is also the alternate powertrain. There is the overall vehicle cost-reduction, cyber security. So we see all of these areas where we can have large long-term engagement — engagements.
Kishor Patil
Just to add to that, during this quarter, one-off, the engagement is a sign significant program, which we have signed during the quarter.
Karan Uppal
Okay, great. Thanks and all the best.
Kishor Patil
Thank you.
Sachin Tikekar
Thank you.
Operator
The next question is from the line of Jinesh Shah from RSP and Venturers. Please go-ahead.
Jinesh Shah
Yeah. Hello, am I audible?
Kishor Patil
Yes.
Jinesh Shah
Yeah. So my question would be that we did saw the market shift happening and that was like two years that was looking for cost reductions, right? So I would just — based on which you already mentioned about that you’ll be hitting the lower-end of the guidance in top-line. So firstly, can you talk about how are things right now with the — with the OEMs, are they like still struggling to maintain their financial performance and how are we seeing that in how it will be reflecting in our top-line? So like if you said that you’ve been hitting 18% toward end-of-the guidance and if I do the math, then for Q4 it might somewhat around 10% if I’m doing correctly Y-o-Y basis. So if you can answer situation.
Kishor Patil
Yeah, at high-level, first you are not fully audible, but as I understand, I will try to answer to the best of my ability. But the first thing is we mentioned that we are the guidance which is in my view, whatever I have seen, it is one of, if not the highest guidance or performance during the not only AR&D, but across all the companies.
The second thing, I think it is, I would urge you not to not to speculate anything. I think I have — we have a strong quarter by closures. I talked about the pipeline going significantly high and conversion and conversations across the verticals. So I can only share that at this point of time. And we have increased our profitability guidance. So it shows that we are in a position to really have a meaningful engagement with the clients. And so the only thing what I want to say is there are two drivers. I have — I will repeat what I have said yes. There are — one is the large consolidation deals from the European partners which many clients had or high-cost clients they have, they see a significant value from KPIT and they also see the value which comes from KPIT. So we are in a position to engage with them.
And the second part is the new verticals which are new sub-verticals where we are engaged, they are also journey towards SDB or the new architecture. So that is what will drive — is driving the pipeline.
Jinesh Shah
Okay, okay that was helpful. And secondly, if you can just talk about like one of the participant already talked about. So like at PAT level because we can see that we have some amount of law coming in challenging. So how are we think it going-forward in next financial year like will it become profitable.
Kishor Patil
Currently there is a share in loss from Corix and how do we see that going-forward? Is that.
Jinesh Shah
Yeah, yeah.
Sachin Tikekar
The I — I mean in our business model, we had maintained that it will continue for some time. But at the same time that the revenue cycle has started. In a new product company, we had expected that there would not be much revenues in the first 18 months. But at least we see some revenue starting from next quarter.
Jinesh Shah
Okay. That’s it from my side. Thank you.
Kishor Patil
Thank you.
Operator
The next question is from the line of Nitin from Investec. Please go-ahead.
Nitin Padmanabhan
Yeah, hi, good evening. Congrats on the solid deal wells and the quarter. I had a couple of questions. So one is, I think I think not only for us, but across the industry, I think both US and Europe have been weak. And our strength in Asia has sort of ensured that we are better-off. Just wanted your thoughts on by — from both the geographies, when do you see them sort of returning to growth for us on an overall perspective? That’s the first question.
Kishor Patil
So Nitin, as I mentioned, I think the wins we had, I think they are led by Europe and across verticals. So I think the growth will come back, let us by quarter one, if not quarter-four, I hope it will return by quarter-four.
Nitin Padmanabhan
Got it. And I think in the last last quarter, we were worried about some push-out of deal execution and this is what even the other players are suggesting. You think that’s sort of subsiding? And while the deal closures are actually quite solid. But you think the deal to revenue conversion will be normal or do you think that also gets pushed out a bit or it’s just normal for us?
Kishor Patil
Yeah. I mean, I can only say that it has — during this quarter also, we were not — earlier when we talked about it, I think we have been in a position to get a good closures. We are very positive about the conversations which we are having. So we do believe that there will be a better convergence than what we expected earlier.
Nitin Padmanabhan
Got it. Got it. And this — but the other expense has sort of increased like almost 11% sequentially. Anything specific within that number or how should we think about that on a going-forward basis?
Kishor Patil
Yeah. It’s an absolutely one-off kind of a thing increase, I mean, but we continue to do that. So I think we have — we had a substantial additional expense during this quarter where we have actually had a significant investment into both technology as well as management development, both for AI and competencies. And we did something on our own significantly. Also, we deployed certain consultants for the same calls, also for accelerating our journey to off-highway and commercial verticals. So that is the expense which has come during the quarter. It’s not something we can just.
Nitin Padmanabhan
Okay, got it. And just one last one. See, when we look at the rupee realization, it’s at around 84%. So how does the — so are we taking hedge losses on the revenue line? Is that how it works?
Sachin Tikekar
No, no, Nitin. If you look at it, our exposure to euro and yen is about 60% and both of these currencies have — I mean, the INR has appreciated against both these currencies as compared to the last quarter, whereas against the dollar, it has actually depreciated. But our dollar currency share is lower as compared to the euro and yen. And that’s why this realized rate that comes, which is nothing but the rupee revenue upon the US dollar reported revenue is a mixture of all of these currencies and it’s typically because of yen and euro, which where the realization has been lower. Hedge incomes or losses are not taken in revenue, they are a part of other income.
Nitin Padmanabhan
Got it. Got it. And just one last follow-up, if I may, is from the large mega deals that we were talking about, how is that tracking and how is the competitive intensity for those deals?
Kishor Patil
I think I can only say that we are always — fortunately, because of the experience and what we have, the competencies developed, we are in a prime position for most of the deals. And I have always said that we are in a very good position on that behalf. I think even from the competition side, the client is very selective because it is not about only price, but because of the competitive pressure on them, they want to get it done very in a quicker as well as you know, yeah, they want a reliability. And the kind of solutions we have and the kind of innovation we bring to the table that differentiate us very significantly. So from that perspective, we are in a good position and not only that, that we are in a position to have some premium in most of these kind of deals. And that reflects into sir, you know some of the performance parameters, both on productivity and profitability.
Nitin Padmanabhan
That’s great. Thank you so much and all the very best.
Kishor Patil
Thank you. Thank you.
Operator
The next question is from the line of Pranav from Ask Investment Managers. Please go-ahead.
Kishor Patil
Yeah. Hi, am I audible? Yes.
Pranav Vasa
Yeah. Just one question is on the margin front. Considering a significant part of our exploration is coming from the ROW geography, which is on the lower-margin side relatively, how are we looking to offset this change in margins going ahead?
Kishor Patil
Understand your last comment.
Pranav Vasa
Yeah. Since a significant acceleration is coming from the ROW geography, which is relatively lower-margin as compared to, say, Europe. How are we looking to offset this margin headwind with the change in mix from geography point-of-view?
Kishor Patil
So that is I think an assumption from your side actually, our profit segment is anything yeah. So many times, we do not see any impact on our profitability because of that. But actually the mix, I think we have the same, if not better profitability as compared to the other part. Actually, if you ask me the — we are getting ready for if I had to say pressure on costs to some extent. But we believe we will be in a position to really have benefit — benefits because of the investments we are making in AI and automation and the productivity. Maybe,, you may want to talk about it.
Anup Sable
Yeah. So from an AI perspective, I think if you look at AI and how it works, there is going to be a significant advantage for companies that have data/expertise knowledge and being very focused on this vertical and the experience that we have gained and the kind of problems that we have addressed to the customer, we believe we are in a good position to start leveraging this using AI. And out-of-the three main applications of the AI, right, one is for what we need to do as a company. One is what we need to do as a company towards our customer and third is what our customers need to do. We are very well-positioned and appropriately invested in those areas.
Kishor Patil
And on-top of it, I may also say that we are also improving our mix of revenue towards either license come platforms come — outcome-based revenues, which where the margins are better. And I think, so we feel comfortable at this point of time.
Pranav Vasa
Got it. Thank you.
Kishor Patil
Thank you.
Operator
The next question is from the line of from ICICI Securities. Please go-ahead.
Ruchi Mukhija
Congratulations on good execution in this tough quarter. I have couple of questions. We have had a very good run-in Asia over last two years. Asia revenues have seen about 2.5 times jump. Do you see this geography to stay resilient and not see challenges that European or North American automakers are seeing today?
Sachin Tikekar
So let me answer that question. We do see growth coming from Asia in future as well. And when we look at Asia, we look at Japan, Korea, China, Southeast Asia and India. And also now there are one or two OEMs that are in the Middle-East. So that’s really Asia. And we believe that all of these markets we are likely to see growth. So we remain bullish on Asia. However, you know, I just want to reiterate what I said earlier, what is being reported as growth from Asia, it does have elements of Europe and US because some of the clients that are actually from US and Europe of large execution is happening out of India. So Asia is getting credit for it. But that’s not to say that Asia will not lead our growth going-forward. Okay. Does that answer your question?
Ruchi Mukhija
Yeah. And then I had a few questions on margin. Now in the prepared remarks also, Mr highlighted, we are working on improving employee productivity and we see that playing out in numbers also. Could you explain what is driving revenue or productivity? What are we doing to keep this lever or engaged for us?.
Kishor Patil
So maybe this is a point I may to share with you one thing. If you look at the last December, the same time, our headcount is almost same, only 50 people or more as compared over the year. And our revenues as you know have gone up by 18% or so. So it shows what we have been in a position to achieve in terms of this. We do hope that with the other automation and the productivity measures, AI as well as the business model, we are — we could continue to do it. I don’t know to what extent, but to a significant extent.
Ruchi Mukhija
Okay, okay. Now coming to headcount part of it. Now for last two quarters, we see headcount reduction. You also mentioned we have been our employee resources in a tight band. So — and this has been happening while we are growing our top-line. So do we have room to further flex utilization or we expect hiring to increase from this quarter onwards?
Kishor Patil
Yes. So actually that was the reason I mentioned the first point that you please do not link the revenues to headcount because if you apply the same logic, in one year, we have not added the headcount. So it’s only 50 people we have added in the year as compared to the last December.
Ruchi Mukhija
So now to execute on the deals that we have wond.
Kishor Patil
So I will answer that question, but the only thing I’m saying is please don’t put on to the headcount part only. So we — we of course have made offers to the — in the colleges next year, we — but we are very selective about the talent which we want to hire in the AI-powered world. World and also the kind of domain we want. So we would be very selective in hiring people of this time or even the young people with the different kind of a orientation and aptitude. So I think as we are really playing a tech technology game, I think that’s how we see as the talent. And I would request you not to look at that while we are making offers for the next year or so. But how it works out, I don’t want to predict anything right now. It depends upon — I mean, you should be happy if we are in a position to increase — get better revenues without adding to the headcount. But at the same time, we continue to hire and look for better talent. We continue to hire more in lower-cost countries, but the good talent, which is not cheap. So I think we continue to do that. Anup, you have any comments on it. On the talent.
Anup Sable
Yeah. Yeah, so we are looking at how the talent competencies will change over the time in AI first delivery. And we are working on that. We are confident that we have already progressed with what our assessment is in terms of what we want and we’ll start — we have already put in-place the mechanisms to identify, train the mechanisms or infrastructure that is required from AI perspective to leverage their talent. So all is in-place. And you know, the going-forward, next quarter and the next year, especially we believe that we will push more of what we think as technology into what we deliver to the customers.
Kishor Patil
And to just answer your question, it’s — we are in a very good position if we are to hire. We can go out and hire because right now we are really an employer of choice. I said our attrition is at the lowest. We are now exciting company to work for. So we don’t see any issue anywhere in the world to hire, not only in India.
Ruchi Mukhija
Thank you, sir. Thank you and all the best.
Kishor Patil
Thank you.
Sachin Tikekar
Thank you.
Operator
The next question is from the line of Abhishek Kumar from JM Financial Limited. Please go-ahead.
Abhishek Kumar
Yeah, hi, good evening. Thanks for taking my question. So I feel that we have expanded sort of our playbook and correct me if I’m wrong, be it in terms of client base, we talked about eight clients out of our T25 in terms of offerings, we have spoken about at length and which we have not spoken earlier. And also in terms of some verticals, right are…
Operator
Sorry to to interrupt, Abhishek, you need to be a little closer to the microphone. You’re sounding muffled.
Abhishek Kumar
Yeah, is this better?
Kishor Patil
Yes, Abhishek.
Abhishek Kumar
Yeah. So my question was that you know it appears from outside that we have expanded our playbook, whether it’s client base, offerings or sub-verticals. And I also see despite a decline in technical headcount, I see an increase in enabling sales personnel. And we just spoke about, you know, deploying some consultants for some of the new verticals. So am I reading this right? Is this a conscious strategy that we are trying to expand you know what we offer to offset or a potential slowdown that we are seeing and therefore investing ahead of the curve so that the revenue trajectory, et-cetera remain a lot more resilient.
Kishor Patil
I’ll answer your question, but I didn’t understand in the modeling you mentioned, just trying to understand.
Sachin Tikekar
Yeah. The way let me try and-answer the question then you — the way we understood the question is you’re saying that we are expanding into three sub-verticals. We are expanding into more offerings. Does that mean that we are hedging in order to — in order to prepare for any kind of slowdown? Is that —
Abhishek Kumar
That’s not yes, the question is same, but I didn’t mean that. I meant that we are investing ahead of the curve given you know some slowdown, et-cetera, but we probably see opportunity in diversity, et-cetera.
Kishor Patil
So at a high-level, let me answer that question. We are we believe our share in the — in the — in the spend of the client can be at more than doubled from where we are. But at the same time, looking at the industry, we want to make sure that we are more broad-based. And we are in the mobility, which is again the very, very same technology — similar technologies and the same type of clients. So that’s what we are.
Abhishek Kumar
Sure, sure. The second question is on — we had spoken about offshoring demand from some of the European and US OEMs. OEMs. It — where are we — you has that kind of demand sustained? Are we seeing some offset in terms of volume from those customers for the price discount or lower-cost that we are passing on? Any color around? And do you see that continuing for next few quarters or do you think that the brand or the majority of the impact in terms of revenue deflation is already now in the base. Thank you.
Kishor Patil
It’s a — nothing is on a territory. It is plus client-specific, but for large set of clients, we don’t see any changes and actually it is reflected in the results, I think the margin is increased and the you know the closures have been higher in both in dollar terms and this. So at a high-level, we don’t see it. It is very customer-specific. 90% of the clients, we don’t see any changes in their behavior at all.
Abhishek Kumar
Thank you. Got you. Thank you so much and all the best.
Kishor Patil
Thank you, Abhishek.
Operator
Thank you. The next question is from the line of Chandra Modi Muthaya from Goldman Sachs. Please go-ahead.
Chandramouli Muthiah
Hi, good evening and thank you for taking my questions. My first question is just on the Nissan Honda merger, which I think was discussed earlier as well. So just want to understand of your 63 active customers today, is Nissana part of that or is it something that you think is incremental if it were to come through a potential Honda merger?
Anup Sable
Evan, difficult to give a client-specific answer, but as Mr said, it will be a be add-on to us in terms of it’s a revenue growth opportunity for us.
Chandramouli Muthiah
Got it. Got it. That’s helpful. Second bit is, I think for many quarters, your active client count, I don’t know-how much it matters, but your active client count has been at 60 clients. And I think after a period of five or six quarters, we’ve now seen it increase by three clients. You also gave some commentary in your prepared remarks that you’ve been able to sign-on some new clients. So I just want to understand what is the nature of these clients? Are these new-age OEMs? Are these legacy OEMs you didn’t work with? Are these semiconductor companies, are they Tier-1s? Just trying to understand that.
Kishor Patil
So it is actually all of it, but let me give a better color on this. So there are few OEMs which we did not engage earlier for both things. I mean, naturally, first, they did not have a clear roadmap for the as well as the investment smark for it. And their direction was, I would say, not consistent with what we — what the solutions or this we have. But what we have seen is many of those are coming back to us of the — even the legacy OEMs, at least three, I can see, if not three to four large ones. And that really brings the engagement with us which is based on what they want to do and what they see, what KPIT has done. So I think that is one part.
The second is the expansion we have done in the off-highway and commercial part. So that there are naturally clients from that side. And last but not the least is what Mr mentioned is we are trying to meaningfully engage with the semiconductor companies together create solutions, which will be very significant for the OEMs. And I think with all these three, we are talking about the meaningful engagements with us.
And now on the number of clients, I think we really continue to work — as you know, we work only with 25, so the number is 60, whatever, and that it is — we continue to engage and we add when there is a — is really we believe that we are going to work together. So we don’t come into POCs, autos, we don’t count really at a point of time we had when — so some of those will reflect in due course.
Sachin Tikekar
And just to add to what Mr said, said so that we avoid the confusion between T25 and 60. I would say more than 98% of our revenues actually come from T25. The remaining 2% contribute to the remaining 35% odd. And these are the clients, A, some of them came through old acquisitions and there are many of them where we are actually — there are small licensing kind of agreements and arrangements. For licensing, we do go beyond T25. So just-for-you to know, the focus continues on T25. The mix will change because there are more-and-more OEMs coming in from PASCAR and we will add some more from trucks and off-highway, whereas the dependence over the last three years from Tier-1 has gone down dramatically. So it’s becoming almost all of it as OEMs in T25. So that focus remains. And as Mr Partin said, we are very judicious about signing-up new clients because we really want this to be a meaningful long-term partnership. And that requires time, but we are actually been putting in that time for the last few years.
Chandramouli Muthiah
Got it. That’s helpful. And my last question is just on the topic of European OEMs that we’ve discussed a few times on the call. So just want to understand, I think the European OEMs are the ones within your mix, which are large, but maybe take a little bit longer to come back. I think you gave commentary that Q4 or Q1 is possible. So just trying to understand what are some of the things you need to see in the industry, in the broader environment potentially for them to come back a little quicker?
Kishor Patil
So I think the first thing is the closures we have done during the quarter, right? I think there are fair closures from the European clients. So that’s the point number-one. Point number two, our — the largest part of as we said, the maximum pipeline, I’m not saying it’s — it’s — the pipeline is across all the three geographies, but the largest is from Europe. And the conversation we see, you know, and the progress we are making recently gives us that confidence. And as I said, the reason for that is basically many of them were engaged with the local partners and high-cost I think engagements. But more importantly, they realize that many things they tried have or locally they would like to find a solution which is quicker and cost-effective and that is where they are coming back to us. And those conversations are progressing and that’s why we mentioned it in a positive sense.
Chandramouli Muthiah
Got it. That’s very helpful. Thank you very much and all the best.
Kishor Patil
Thank you.
Operator
The next question is from the line of Bharat Shah from Ask Investment Managers Limited. Please go-ahead.
Bharat Shah
Yeah. I think this call has come little late. I have to get off the call to something else but quickly what I understood from your narration is that your clients’ business challenges apart, they progress on the sales being good or otherwise apart. Fundamentally, we offer a solution and a capability which results in a relationship with a client — with autoClient, which is not transactional, but which is a deeper engagement. And therefore, that gives us ability to grow even when your clients are facing challenges. And that was in some sense is a meaning I could derive. Absolutely. And to add to that, I mentioned that our share in the client spend is still can more than double. So putting what you mentioned and that part, I think we believe that we will be in a position to grow our relationship.
Kishor Patil
Bharat, I think you should become a spokesperson. You articulated the — as you know you are spot-on. We must appreciate that the way you captured it.
Bharat Shah
Thank you, which means we are not linearly correlated to the business issues and challenges and otherwise facing clients, we are fundamentally problem solver for them. And so long as these clients are going to remain in the business where technology flux, whether it is EV or hybrid or this or that, really is an opportunity rather than a concern for you.
Kishor Patil
Absolutely, absolutely. And I think we have been talking about it for last three, four years that our revenues or the spend does not linearly connect with the vehicles sold, but it is about the product development and the future platforms they are creating. And to your point, you really articulated it well as Mr had mentioned. So absolutely.
Bharat Shah
Thank you. Just one last bit. On CV revenues remaining softer, yeah, what has been the factor? Is it transitory kind of issues with the clients end or it is more structural?
Kishor Patil
No, it is actually very specific to one or two clients. And actually, we have made significant investment in these two verticals off-highway and commercial. And we again want to engage only in a meaningful manner. And that is certainly what we want to do. So it may take some time and — but I mean I’m sure we’ll start seeing the results next year.
Bharat Shah
Fantastic. This has been very, very helpful. And all the very best wishes.
Kishor Patil
Thank you very much.
Sachin Tikekar
Thank you.
Operator
Thank you. The next question is from the line of Mihir from Asset Management. Please go-ahead.
Mihir Manohar
Yeah, hi, thanks for giving the opportunity and congratulations on good set of numbers. Sir, you mentioned about the pipeline with growth being there 20% Y-o-Y. Can I get a broader sense as to how has the pipeline growth grown over the last three months, last six months? You mentioned a significant growth, any number over there will be helpful. And also what is the growth here in Europe and on a three months, six-month basis, is the pipeline growing strongly for Europe? Some color around that will be helpful.
Kishor Patil
So we do not mention the pipeline. As I said, it would be misleading,
Mihir Manohar
But this is just a Y-o-Y number. Sorry to interrupt, but just a Y-o-Y or Q-o-Q number, not the absolute number.
Kishor Patil
So yeah, that’s what I’m answering. So actually I’m saying it is a quarter-on-quarter 20%, it is not year-on-year, the increase in the pipeline and it’s a very — yeah, it’s a significant number. It’s a 20% increase in the pipeline and it is led by Europe. So there is a significant increase in the pipeline in Europe as well.
Mihir Manohar
Sure, sure. Understood. Correct. Correct. Given the conversations — the kind of conversations which were happening on Europe, should we see our company growth levels coming back, I mean the earlier growth which were there from 1Q onwards?
Kishor Patil
I don’t understand this part, maybe I will understand over the period of time. But this year also, we are having one of the best growth in the industry. But it’s okay. I think we see the opportunities are good. Conversations are good and we will talk about it in April.
Mihir Manohar
Sure. And just second question was on the change in the US administration, which is there. Now incentives have also been phased-out on EV side. So I mean, I understand these are early based, but what could be the possible impact for us given the fact that we have such a tremendous experience in the industry, you know, how should we see the change in US administration on the overall EV and specifically, I mean, you are in the outsourcing side?
Kishor Patil
See, actually, we answered this question few times earlier that actually it’s a broadening of the products for the end-consumer and we deal — we work-in all the three. We do not see any significant impact. Not only that, we see opportunities actually because these will be separate programs. And SDB is beyond EV and that — I think we explained that earlier.
Mihir Manohar
Sure. That’s it from my side. Thank you very much.
Kishor Patil
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing comments.
Kishor Patil
So thank you everyone for your active participation. And if you have any more queries, please feel free-to write to us. Thank you so much and have a great evening. Bye.
Sachin Tikekar
Thank you.
Operator
Thank you, ladies and gentlemen. On behalf of Dolat Capital, that concludes this conference. You may now disconnect your lines.