KPIT Q2 YoY revenue drops 2.2% $176 million | India Business News

Bengaluru: KPIT Technologies reported dollar revenue of $176.8 million in the September quarter, flat sequentially and down 2.2% year on year, as a decline in business from its two largest clients weighed on performance. Revenue from these accounts fell about 13% over the year.In constant currency, revenue grew 0.5% sequentially and 0.2% year on year.EBIT margin improved 40 basis points sequentially to 12.7% from 12.3% in the June quarter. However, it remained below the year-earlier level of 16.4%.KPIT also reported a forex loss of Rs 17.1 crore and a share of loss of Rs 15.6 crore from Qorix. Management expects both to ease from the December quarter. Qorix was founded in 2023 as a joint initiative between KPIT Technologies and the ZF Group to address the growing complexity of automotive software.The company secured new engagements with a total contract value (TCV) of $213 million during the quarter. The wins included a leading American carmaker, two European carmakers, a leading Asian carmaker and an American commercial vehicle maker. The projects span powertrain, connected technologies, middleware, autonomous systems, cybersecurity, electric powertrain and aftersales.KPIT ended the quarter with 12,347 employees, an increase of 44 sequentially but a decline of 532 from a year earlier.Geographically, US revenue rose 15.7% sequentially to $62.4 million, while revenue from the SIMA region increased 27.6%. Europe revenue fell 15.2% to $74.5 million.Co-founder and joint managing director Sachin Tikekar said the company was focused on building a more diversified and resilient growth engine. He expects the decline in business from its two largest accounts to bottom out over the next couple of quarters.European original equipment manufacturers (OEMs) continue to face significant pressure, with sales declining and margins under strain. They are pursuing substantial cost-cutting initiatives, which are expected to continue for a few more quarters. This is primarily due to competition in China and from Chinese players in other markets, particularly Europe, Southeast Asia and the Middle East.American OEMs are relatively protected because a bulk of their revenue comes from the Americas. They remain in a better position than their European counterparts. The situation is similar for Japanese OEMs, given that America and Japan are their two largest markets.Year-on-year declines are steepest among European OEMs. Japanese, Korean and American OEMs have also seen declines, but these are not comparable to those experienced by European players.