After having posted a decent set of Q2 numbers, Kishor Patil, managing director and chief executive officer, KPIT Technologies says the company is poised to better it in Q3.
Speaking to CNBC-TV18’s Latha Venkatesh and Sonia Shenoy, Patil says the company’s automotive segment has picked up smartly as has its SAP business.
Hence, despite it being a relatively short quarter, Patil is confident of posting better margins in Q3.
The company has reported a net profit of Rs 70.6 crore in Q2, marking a rise of 5.7 percent year on year.
Below is the verbatim transcript of Kishor Patil’s interview to CNBC-TV18’s Latha Venkatesh and Sonia Shenoy.
Sonia: You have actually reiterated your revenue guidance to some extent though the PAT guidance is a little under the weather. Can you give us more colour in terms of what you might do in terms of revenues and how are billings and realizations looking like?
A: This is a landmark quarter for us as we reach half billion run rate and we have made a significant progress to reach half billion revenues. In terms of revenues we see a significant growth both in US and Asian market. Asian growth as you can see is very strong during this quarter.
In terms of vertical if you look at the automotive vertical has grown substantially and as you know automotive is our specialized and focused vertical and it has really returned to significant growth which is very good news. Also the SAP business unit which was not performing as per our expectation in last few quarters have shown a good growth. With this I think the overall outlook in both these sectors and regions looks very strong and that is why we have come to the growth numbers.
In terms of margins I feel the margins can only improve from here where we are. I think specifically next quarter is not like this quarter as it has five working days less than this quarter. But in Q4 the margins will certainly expand.
Sonia: What has the contribution of the I-Cubed integration been in this particular quarter? I understand the full benefit was expected to come in Q2 onwards. Can you elaborate on that?
A: It is a very marginal number during this quarter because really the revenue growth will come after a while because the integration just has happened. So even it is less than actually 1.5 percent contribution to this. I think most of the growth has come due to some of the products which we brought and we have been talking about the intelligent transportation and some other products in this part as well as automotive business we did where we have got a significant growth in North America and Asia.
Latha: Where do you see growth in FY16, is their any visibility and will it be remarkably better than FY15 you think, how is the order book looking?
A: I don’t want to get into FY16 but what we can see is this is a sustained growth which we are seeing specifically in the automotive and manufacturing verticals. We have made a significant progress in terms of closure of this also in energy and utilities. So we feel very good about the demand environment overall.
We see significant opportunities in North America and Asia. We have not done as well in Europe during this year till now. But we have closed some very good deals. So I do about that by Q4. We will also see good growth in Europe. So overall I see a good demand environment.
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