Bengaluru: KPIT Technologies reported a muted first quarter as weakness among global automakers continued to weigh on demand. However, the company expects margins to improve in the coming quarters and remains confident of a stronger second half, driven by AI-led growth and a diversified business mix.The Pune-based engineering company reported June-quarter revenue of $176.8 million, down 0.6% year-on-year in dollar terms but up 0.1% in constant currency. On a sequential basis, constant-currency revenue declined 3.6%. Net profit fell 32% year-on-year to Rs 117 crore and was down 28% sequentially.KPIT also reported healthy deal momentum, securing new engagements with a total contract value (TCV) of $257 million during the quarter.CEO Kishor Patil said the global business environment remains uncertain, with geopolitical tensions continuing to weigh on the automotive industry. Competition from Chinese automakers, supply chain disruptions and higher costs have put pressure on global vehicle manufacturers. Several automakers in Germany, France, the UK and Japan have announced cost-control measures, lower sales volumes, job cuts, profit warnings, pay cuts and asset write-offs, he said. These developments also affected KPIT, prompting the company to revise its revenue and profit outlook about a month ago.Despite the challenging environment, Patil said the company continued to record healthy deal wins across the US, India and Southeast Asia, including a strategic engagement with gaming platform AirConsole through Tata Motors.“While a few of our largest clients continue to face pressures, the strategy we have pursued to diversify our growth across clients, geographies, mobility segments and offerings is beginning to demonstrate its resilience,” Patil said.In June, KPIT had warned of a sequential margin contraction and a 1% year-on-year decline in US dollar revenue for the first quarter, citing budget constraints and profit warnings at European automakers that delayed software spending and new engineering projects.
