KPIT Technologies was one of the worst-hit firms in the IT and ITeS space when the coronavirus struck, as it caters to automotives, a sector severely affected by the outbreak. Its revenues declined 17 percent sequentially and 8 percent year-on-year in the first quarter of FY21.
The Pune-based company announced pay cuts in the range of 10-50 percent across levels for the over 6,000 plus workforce between April and September 2020. There was a hiring freeze, too, and wage hikes were paused.
But things changed—gradually and then picked up pace. From not making cars to a huge push for electric vehicles in the US and public transport such as trains in Europe and return of clients' tech spending, KPIT Technologies started seeing a turnaround.
Sachin Tikekar, President and board member, KPIT Technologies, said, “It is funny how the focus has shifted.” A year later, things are different, or as Tikekar put it, "Tables have turned."
KPIT Tech is expanding its employee stock options pool (ESOP), rolling out double-digit hikes and is planning to hire aggressively for FY22 as it sees strong demand.
For the quarter ending June 2021, KPIT reported $77.2 million in revenues, up 18.3 percent year-on-year, with the US, Europe and Asia seeing double-digit growth. With large deals in its kitty, the company is looking at a significant growth over the next few quarters.
Talent problem
Talent, however, remains a challenge, as is with the other IT players. "Employee turnover has gone through the roof across the globe, especially in India and the US,” Tikekar said. So the company, he said, will be hiring aggressively.
The company added 200 people in the last quarter and would get another 1,500, a mix of freshers and laterals, this year. “But given the technologies that we work in, we are also a net talent creator in some of the technologies, so that's just going to take time. But hiring is going to be tremendous, and it's going to be a challenge but it is a good challenge to have,” Tikekar said.
This is only one part of the problem. The other is the growing attrition rate. “Attrition is at a high level now and it will settle down in H2,” he said. The company did not disclose the rate of attrition but it is taking steps to address it.
This includes long-term incentives, in terms of restricted stock units, and double-digit hikes.
Stock options, hikes
KPIT has expanded its 2019 stock option plan to a bigger set of employees. “Two years ago, we had rolled it out to a few hundred people and now we want to extend this to a few more this year,” Tikekar said.
Under this, close to 68,000 shares will be given to eligible employees with a face value of Rs 10 a share, the firm said in a BSE filing.
“Secondly, given what our employees have done in the last one year in the face of adversity, we really want to reward them by doing double-digit on an average salary hike this year, which will be probably one of the highest, in the industry,” he added.
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