Technology services firm KPIT would go after niche technology acquisitions in the range of $20 million to improve cash utilisation and gain capabilities, CEO Kishor Patil said.
The company reported zero debt and its highest ever cash reserves at the end of fiscal 2021. “The acquisitions will not be big ones, but they will accelerate our strategy,” said Patil.
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KPIT has also put in place a new dividend policy with the aim to improve returns for shareholders to 35% over the next two three years. The company announced a final dividend of 29.5% for FY21.
KPIT reported a profit after tax of Rs 141.39 crore for FY21 as against Rs 146.7 crore in FY20. Revenues were down to Rs 2,049 crore. This was largely on account of the impact of the pandemic in the first half of the year. Patil said he expects the business to grow in double-digits in FY22 on the back of a strong order book and deal pipeline.
The company, which focuses on the automotive and mobility sector, has said that it will operate in the connected, autonomous, electric and shared vehicles categories.
It reported sequential growth in revenues of 6.8% led by connected vehicles and autonomous driving. It has identified its top 21 clients and has been working on deepening the work it does for these companies. In the past year, the share of the revenue from these companies increased from 81% to 85% of the total.
“We are looking at the increase in the adoption of virtualisation, cloud transformation and new business models which are coming in with this in the engineering space,” said Patil.
There are multiple changes in the architecture of vehicles as well as the business models of car companies. So, if the number of vehicles sold stabilises or goes down over a period, these companies could get into other areas like shared mobility or fleet management, all of which would require more technology, and these are some of the areas that KPIT is starting to work on.
The company had very low attrition levels in the past year, but Patil expects it will increase in the next two quarters and eventually stabilise in the second half of the year as people leave either for other opportunities or for reasons like pursuing higher education. The company will be rolling out salary hikes as normal this year, he said.
About 3% of its workforce has been impacted by the pandemic and the company continues to work on ensuring their safety, Patil said.
