Will sustain current revenue growth momentum: KPIT Cummins

Revenues during first quarter of this financial year rose by 82.6% to Rs 538.26 crore compared to Rs 294.78 crore in the corresponding period in FY2011-12.

Kishore Patil, managing director and chief executive officer, KPIT Cummins told CNBC-TV18 that the company is hopeful of maintaining the current revenue growth momentum going ahead.

"Our growth will be evenly based so we will continue to grow. We believe that the growth momentum what we have setup and what guidance we have given for the year, we will be in a position to meet if not exceed,” he elaborated.

Revenue in terms of US dollar is expected to grow at the rate of 31-34% in FY13.

Below is the edited transcript of Patil’s interview with CNBC-TV18.

Q: Can you break up how exactly do you expect to sustain the guidance which you have given for FY13, give us the key parameters of growth that you are expecting and what would your exact guidance for FY13 be then? What exactly is leading to this strong guidance, just to rephrase?

A: We have given the guidance for this year which is somewhere between 31-34% in terms of range, in terms of growth in USD. So, that would somewhere be between USD 408-415 for the year. So, we are very happy the Q1 starts with good growth.

What we can see is that growth which we have seen in the Q1 that is exactly what will continue to grow. There are two to three areas where we see good growth. The US market continues to grow faster. We believe that Asia-Pac will help us because we have closed various deals in Asia-Pac that those revenues from that will come up.

The third is our top 10 accounts including Cummins has shown us a good growth and may not continue with the same type of growth, but certainly these accounts will drive growth for us.

We did Systime acquisition last year, we have been in a position to grow the Systime revenue more than 11% quarter on quarter this time. We expect similar growth momentum not the similar percentage, but similar growth momentum during the year.

If you look at the industry segment, while automotive and manufacturing is our growth segment but we believe utility will certainly grow faster. Even in the Q1 you can see that our growth in that sector as well as in the manufacturing sector has been the highest in the industry. So, the focus on these two sectors will continue. Utilities will also contribute little higher going forward.

Q: There has been a slight pressure on your margins, how do you think your margins will pan out?

A: In terms of margin I think the first thing is we have probably given one of the best increments in the industry in this year. While many companies have not given or have postponed or given partially. We continue to give really top of the line in terms of increments offshore and onsite. But we believe there are two to three major drivers for profitability improvement, one is higher offshoring. As we are integrating this entity more and more offshore, we will increase the offshoring.