Thanks for the opportunity. A couple of questions from my side. Firstly, on the pivot to solutions-led offerings versus service-led model which we used to have. So, do we expect to gain market share from our peers given our solutions or you expect that could the outsourcing of work increase from OEMs versus the work which they used to do internally? That is part one. And secondly, with this solutions led model, do you expect any cannibalization of the existing revenue? If yes, if you can quantify it? Okay, thanks for that. Second, on the geopolitical environment with the new tariffs being announced by the US for new nations and EU-US trade deal in question. How are OEMs reacting to it? Are they comfortable to spend on their new age R&D programs or they may again pause before some clarity emerges? Okay, thanks for the detailed color. This last thing on the TCV, Kishor sir, TCV was a bit muted this quarter. How is the pipeline looking and what's the overall outlook for FY'27, if you can elaborate?
I mean, the first thing is that, during this time, I think when you get the orders, nobody's ready to sign a very long-term deal most of the time, but there will still be a few. But the point is, this is the last quarter and it really depends upon what the budgets are remaining with a particular OEM. So, this, I would not read too much into it. But you know that we give any understanding about next year around April. But if I have to give you some understanding, I will make only two statements. One is, we believe that in the last quarter that is Q4, we will improve, our growth will be higher, it will be the highest quarterly growth in FY26. I mean, anyway, we did not have much growth, but there will be higher growth in Q4. That will be the highest growth quarter from this year. And our profitability will improve from what we have in Q3 in spite of our investments. This is one statement. The second thing is, we feel reasonably, I mean, and please recognize that we will tell you at end of Q4, but I am just giving you my feel right now. We will for sure grow next year higher than this year. And we believe that we will be in a position to do it. Now, some of these transitions, which we talked about exactly how much, when, time difference, we are a little bit not sure. So, we are not putting exact number right now or we will see what we can do by April, what we can talk about it. But this is the high level color, I can give now.
The first question is on this change in strategy. A few quarters back, we were speaking about a different strategy where we were speaking about getting the learning from China and providing services to the European OEMs, right? And secondly, the indications that we provided last time in Q2 regarding H2 this year, they have not yet reflected in Q3 as far as margins are concerned. And last time we also spoke on FY'27 to be a promising growth year. This time we are sounding a bit bearish while still guiding for a better FY'27. So, I just wanted to understand from you, like how to interpret this, means what has changed over the last quarter? And are we like still confident for a very good Q4 that we guided last time and a very promising FY'27?
So, the first thing is that there is a change in Labour Code which was being discussed for last 3-4 years and it came in last 3-4 months. So, nobody knew when it would hit. It has one time impact and it has an ongoing impact specifically for this industry. So, that is point number one. Point number two, I would say that, I mentioned to you about the overall investments which we will continue to make. And I think we believe that it is very important from the company strategy viewpoint to continue to do that and actually double down on that. We have, and we will do that. Certainly, I would say that in Q3, we have got a bit short by about a million dollar or so in organic growth. But that happens in this kind of environment by even some movement of projects from now to next quarter or so. So, this kind of changes happen in this kind of environment. And Q4, I mentioned that based on what we think, it will be better than all the three quarters we had. It doesn't say much, but it will just say that there will be a positive growth organically and our profitability will be steady, including this cost, which will be higher than what it used to be.
Thank you for the opportunity, sir. Sir, I just had a question on the transformation that we are making. If you could take us internally, what are the metrics you're tracking to gauge the progress of this transition? And as investors, how should we look at what metrics should we track, which you disclose in order to gauge what the progress means over the next 12 months to 18 months?
So, from the services to solutions, the one metric that completely changes is, what becomes most important to us is the revenue per employee. That's something that we also write in our report. That's one of the key measures that not only we track internally, but that's something that makes sense for the analysts and investors also to look at. I think this becomes the most important. So, I think what we will do is, at the end of the year, we will come out with a more detailed conversation on this. And we will share more details about it. Right now, we have some ideas. But in the next 3 to 6 months, we will have a better idea.
Hi, thank you. The first question is, if you look at your peers' commentary over the last few weeks, everybody's talking about a good demand outlook, positive deal conversion to revenues, which should be in excess going forward. So, just curious to know, do you share the same outlook or is it something different for KPIT team? Peers have been talking about good growth in automotive. This second question is on AI solutions. So, we have seen a lot of IT companies and even some of your peers try this solutions approach or IT-based approach in the past, but haven't seen much success out there. So, what is different this time? It gives you confidence that AI solutions can become a bigger part of your business in the next 2 to 3 years and is there any target you have in mind in terms of how much the solutions can contribute to revenues versus the course of the next three year period?
And I think what has changed from last time, there are two things. It didn't work as much. So, a lot of lessons learned. And I think this time, most of the solutions have been vetted by the client. And some of them are already been piloted during the course of this year and last. So, that gives us a lot more confidence that this time is going to take some time, as Mr. Patil mentioned, 12 months to 18 months before we start to make the shift. And in the next couple of years, we would want the majority of our business to come from solutions.
Hi, good evening. Wishing you all a very Happy New Year. I had a couple of questions. So, one is, see on the solutioning, I think when we listed in 2019, we actually at that time spoke about maybe having prebuilt 15 % to 35% or 40% of whatever customer seeks to build. And that's tested to be error-free code and thereby we accelerate for clients. I think this is more or less similar, but I think you're doubling down. So, if you could give some context on what that doubling down is.
Yes. So, first thing is, thank you for remembering what we said in 2019. So, I think at that point of time, if you remember, we were moving towards the domains, which was electrification, autonomous, infotainment, then we moved to digital cockpit, that kind of a thing. So, basically we had created a certain, what I would say, visible demonstrations of what the client will get ultimately. And I can say that actual usage of those into the actual delivery was not more than 5% to 7%. So, it was more towards understanding the requirements, the client understanding, what could be the functionality. Now, more and more, as Anup mentioned, this is not about projects. This is about a full solution, which you are giving to the client. So, this is a more holistic solution, which we are giving. So, there is a huge difference. And, we are expecting at least 50%-60% kind of reusability benefit is in most of the solutions.
Hi, good evening and thank you for taking my questions. I was just trying to understand on businesses which we have already won over the past 12 months. In your view, what are some of the milestones which need to be crossed before we can see some of these revenues, some of these businesses accelerating into revenues? And just secondly, can you share any early learning post the Caresoft acquisitions? What are the amount or magnitude of synergies you see from this asset?
So, For the pipeline, what we have won, the prioritization sometimes changes, so it gets slowed down. But many of these deals are over 3 to 4 years. So, I think these revenues will convert. On the Caresoft perspective, I think the integration, etc. we are already in the market. We are moving forward as Mr. Tikekar mentioned. I think we are also adding to their capabilities and adding one plus one to more than three. That's basically the potential. Also, off-highway commercial, we see as a growth area. I mentioned that. And Caresoft gives us some good leads into that part. Also, on N-Dream, which is a small acquisition relatively, we see a high potential in that, specifically both in terms of growth and profitability. And it is already in two million vehicles, and we expect it to be about three million vehicles next year.
Thank you for taking my question. My question is related to Qorix as well as this solution-based shift. It sounds like what we are doing in Qorix is also solution-driven, although we are packaging it as a product. So, just want to understand what is the difference and also what is the traction we are getting on Qorix?
So, I think as you can see for some quarters there are fluctuations, this quarter we have got good revenues. it might not be true for the next quarter. So, it is based on the licenses. I think one thing I can tell you is there are again multiple changes which are happening. One is that, new vehicle programs have been pushed out because of the problems the OEMs faced in the existing program as well as keeping the spending in mind. I mean, I would say postponing the spending on the new programs. So, because of that, the middleware and operating system spend went down.
Thank you. So, my first question is that in the last few quarters, when your growth has slowed down, has your share of the pie gone down or you've lost market share or the pie itself for you has gone down or is it both?
So, basically, if you look at mobility, from passenger car perspective, their spend has gone down by 20% to 25%. It's a dramatic, I think their volumes have gone down substantially, their profits have gone down even more. Except for one or two clients, we have not lost our wallet share in any of our T25 clients. In case of majority, we have actually gained wallet share. So, basically, the pie has shrunk quite a bit and that's the reality at this point.
Thanks for the opportunity. I hope I am audible. I am not sure whether this is already addressed. So, Asia, as a geography, has been declining for a few quarters. And what I understand, we had a mega deal here, we have a large client, and they've been backtracking or they've been reducing spending in certain areas. So, can you throw some light what will happen in Asia as a geography and when will we start growing for us?
We look at Asia in two regions. One is Japan, Korea, China. Second is India and Southeast Asia and Middle East. You're right about a specific OEM, A, we have been doing a really large program and all large programs come to an end. So, we will go through that. However, what we have done in Japan is we have started working with a couple of others. And hopefully, you know, over a period of time, that will give us some growth, not only in Japan, but also in Korea. And as Mr. Patil explained, we have started to see some wins coming out of China. So, as a region, we believe that it will come back in some time. However, the India and Southeast Asia part will grow.
Thanks for the opportunity. In this pivot to solution-driven business, is it fair to assume as we are taking a lead in SDV ahead versus peers in terms of solution-based delivery method, we are planning to repeat the same thing, which will help us in terms of winning the further wallet share and may help some of the Western OEMs, both in the US and Europe, to launch the new model as fast as Chinese EV players or the OEMs are launching and taking the wallet share?
Yes, your line is not very clear, but let me explain what I understood out of the question. Your question to summarize is, is the solution offering that we have to the OEMs going to increase or better their time to market? Yes, the answer is yes. Most of the solutions that we are talking about, some of them, definitely some of them are really about very, very difficult things that the OEM does during the development of a vehicle. And because we have these solutions ready, we definitely feel that the time to market will significantly decrease for the OEMs.