KPIT Technologies Limited ($KPITTECH)

Hello, and a very warm welcome to everybody for this KPIT Technologies Analyst Meet. As we do always, we will have the presentations by the KPIT leadership team, and then we'll have this open for Q&A from all of you. So since today, we have an extended management team present, we will do a small introduction of who is present here from KPIT leadership, which would be done by Priya Hardikar. Priya herself is a part of the leadership team. She's our CFO and a part of the Executive Board. And she handles, obviously, as being a CFO, all the accounting, auditing, legal, taxation, Investor Relations, compliance, all of these are under her. So now I would request Priya to please come over and introduce the leadership team. And once again, thank you for joining us on this meet.

Thank you, Sunil, and very warm welcome all of you. I'm happy to introduce my colleagues with you. I mean, I'm sure you know most of them. Mr. Kishor Patil, Co-Founder, CEO and Managing Director. Kishor, as you know, has led the company's transformation into global mobility technology partner. He has been and continues to shape KPIT's long-term strategy across mobility, software and automotive innovation. Mr. Sachin Tikekar, President and Joint Managing Director, Sachin drives KPIT's growth agenda and client relationships. He plays a key role in scaling KPIT's presence across the markets and strengthening strategic OEM partnerships. Mr. Anub Sable, Whole-Time Director and Chief Operating Officer. Anub oversees KPIT's technology visioning, execution, delivery excellence and execution rigor. He focuses on full stack tech that will help OEM transform their road maps and bring excellence in their performance. Mr. Chinmay Pandit, Whole-Time Director and Head of Americas. Chinmay leads KPIT Americas business and strengthening OEM relationships and expanding regional growth. He focuses on market development, client trust and strategic execution. Mr. Pushpahas Doshi, Head of Strategy and Growth Office. Member of Executive Board, Pushpahas has led KPIT strategy, growth initiatives and new mobility businesses. He drives portfolio expansion across the connected products, digital mobility and strategic market development. Mr. Omkar Panse, CTO, Chief Technology Officer. Omkar leads KPIT's Global Technology Vision, software-defined vehicle strategy. He also drives next-generation EV architecture, SDV platforms and mobility technologies across the domains. Mr. Gaurav Kakati, Chief Technology Officer, AI, the buzzword. Gaurav heads KPIT's AI strategy, focusing on generative AI, agent solutions and AI-led transformation of automotive software life cycle. He brings deep expertise in enterprise AI automation and innovation. Thank you, everybody, and welcome once again. Over to you, Kishor.

Good afternoon and very happy to really welcome you after a long time we are having this gathering, and I really missed it for the last few years, and I'm so happy that we are doing it at a time when there are many questions we need to answer, I think. So great to have you all here. So, this is basically, as we call it, the next phase of transformation and growth. KPIT is always trying to consolidate and grow and further its thought leadership as well as the market leadership in the areas in which we operate, basically mobility. And that's why I think I'll give you some overview about this. First, I will very quickly for -- you all have seen the results, but I would quickly take you through FY '26 performance, market trends and KPIT response. I think this is the part I will cover. Anup will talk about technology moat, what is the differentiation of KPIT in multiple ways for future, today and future. Sachin will talk about the resilient growth. There are many questions about the industry is that how we are expanding the overall market, how we would like to do this in spite of disruptions in industries or beyond global environment. And then, of course, I will come and talk about the midterm outlook. I know some of you want to do it the other way, but I think this all you have seen it has been a bit of a muted growth year. But ultimately, we had a good Q4. I think we had a growth of 1.8% in constant currency, 1.9% quarter-on-quarter growth in terms of dollars. In terms of rupee, it basically it's a growth of 12% and quarter-on-quarter, it is 5.8%. The key highlight, if you want to ask me, is the 349 million working closed during the quarter. It basically says that there is the number of deals, the number of engagements we have signed, and we have, of course, announced a couple of them specifically, I will cover them later. So that is very important. Pipeline continues to be satisfactory. Important part is the solution products, that's our next pivot. And we'll talk about it, what does it actually mean, what it means to us, what it means to our clients, how do we differentiate it? It's a 21% of the total pipeline is already into products and solutions. So, it basically gives us a very encouraging sign. I mean, cash generation has been very good for the company over many years. It continues to be that. Dividend payout after dividend payout, it is INR 9.6 billion cash at the quarter end, and we have the final dividend, which is INR 5.25 per share. DSO stood at 47 days. Dividend is about 33% kind of a payout. If you look at the revenue, the little going a little down, 18% year-on-year growth in trucks and off-highway. So, as you know, last year, we decided that we will expand into truck and off-highway as a segment. And now it is 18% growth year-on-year in trucks and off-highway -- and the Q4 growth was also led by trucks and off-highway 11.6% and the second was cloud-based connected services. So, these are some of the areas where we saw that detailed part about the growth, Sachin will talk. I'm just talking about the highlight of this quarter and overall. And EBITDA growth margin is for the year, 20.8% and for this quarter, 20.6%. I must tell you that -- what we have never compromised is on the investments in technology because we believe that is the core of KPIT, that's a core of future, and that's what we will continue to do it. Most of the companies have less than 1% investment into technology. We have done more than 3% for many years. We have upped the investments more than 5%. And I think that is a very important part, I would say that after doing that, we continue to have one of the best EBITDA numbers in the industry. Let's talk about the tailwinds as well as the headwinds. So, the growth is driven by connected vehicle, powertrain, vehicle engineering and aftersales. I wanted to say this a little bit here. This is how the actual thing is. This year, it is driven by all the 4 segments. So connected vehicles, we'll see in terms of technology. Of course, this is the area of the highest growth in the industry, one of the highest growth in the industry. Powertrain also continues to grow. Now the powertrain is electrification, it's conventional, it's hybrid. And there are also pilots we are doing in terms of hydrogen-based systems. So, I think it's more broader than pure electric, but nevertheless, we continue to do that grow, even though naturally, the growth is not the highest in that part, but we have grown in that. The vehicle engineering, this I wanted to bring it out. This is a different part of the acquisition we did in the Caresoft last year that actually we doubled down on that beyond software. The reason is we wanted to make sure that we are in a position to address one of the key point of pain for our OEMs, which is cost reduction. And when you look at the cost reduction, it is not about software, but it is about overall cost of the vehicle. And that's where Caresoft has certain competencies, some platforms. With that, we are in a better position to deliver that. But more importantly, in the industry, typically, people have been doing the benchmarking, which has been a more hardware benchmarking. We bring to it now software benchmarking, which is really one of its kind, which tells them in terms of how the performance is going to be there, how the security is going to be there. So, these are some of the things which we are adding. So, these are the areas which continue to grow. And last but not the least is aftersales. This is one of the fast-growing areas for KPIT. And aftersales is very important because OEMs are looking for sources of revenue for them going forward and not at the point of sales, but throughout the life of the vehicle. And aftersales has become a big area. And I think that's the area where we have built a very strong solutions. And I think you will hear about. It's a 9% year-on-year growth with OEM clients, which has been our strategy. We did have a drop in certain parts, which -- just to tell you on it, Tier 1 revenues, which has never been a focus. But whatever we had, I think actually, there was a drop in that. We have strengthened the China presence and 2 new engagements with Chinese OEMs. This is very important. It's a very small part of our revenue, but it is important for us because China is a big market. The second thing is it has different type of OEMs than the traditional. Later, there is a possibility that Chinese OEM, which already are entering into the other markets and can take the market share also in other markets. So, we want to make sure that we are successful in China. It's not the easiest market. It will take time, but let me tell you, we have spent time and effort. And now we have 2 clear Chinese OEM engagements, which even though the revenues are not that great, I'm very proud about it. And 18% year-on-year growth in trucks and off-highway, I mentioned, and accelerated pipe generation in AI-infused solutions and products. So, this is the focus area, and this is how we did last year. In terms of headwinds, AI-led transformation led to near-term cannibalization in some areas, in some cases. But over the period, not over the period, we see a larger opportunity with AI-based solution. But sometimes in the short-term, in a particular case, it can cannibalize a particular part. But over the long-term, we see that we are in a position to take end-to-end, and that's why we are moving towards the solution, taking the full ownership of the solution. And actually, it adds to the revenues and lower-than-expected growth in middleware and autonomous driving. And one of the important reason for this is many new architecture programs have been delayed. And that's why some of the middleware or some of those companies, actually, that got pushed out many of these programs, and we -- our revenues have come down on that area. And autonomous driving, the game has a little bit changed. I will show you, it is one of the high-growth areas going forward. And there is a better adoption of this area. The only thing is the way it is there. Earlier, all OEMs wanted to develop their own stack, and they realized that they failed in that and they could not do it. So, it is more about really integration. It is more about how do you really train that and how do we build on the stack. So, these are some of the things which we need to do. So, there is a different approach. And there are some demos you can see later, you will see it. So, I think that is there. And last but not least, in a few accounts, there was program cancellation and delays in a few accounts, and I will talk about it later. So, it challenged near-term growth, but expanded foundation for substantial future expansion. I must tell you that what we have achieved last year is one of the best we have achieved in the last many years in terms of qualitative progress, both in terms of changing the complexion of services, taking the lead in terms of AI, the products journey apart from solutions, the product journey and also the markets where we have expanded. So, I think I'm very proud about what we achieved. And of course, the leadership development, which we have been in a position to achieve which is going to be a base for the future growth, not only for a year or two, but going forward. These are the two strategic engagements we talked about. The important -- the reason I wanted to talk about is the many vehicle programs got pushed out, as I talked about, but that is more in passenger car area. But off-highway and commercial now are looking to adapt into SDV or AI-based software development, right, AI DV. So, I think this is one of the -- I would say, one very important engagement which we have won. And that's why the strategic value is more than only the value -- financial value. It's a long-term partnership in excess of $50 million focused on large-scale software-defined transformation. It is for this -- and for the next-generation machine platform. So, this is called SDV, generally, we call it. Here it is called SDM, software-defined machines, so that -- and it is shift from legacy architecture to modular platform that electronics and software architecture. So, I think this is important from that aspect. This is the second thing is leading Japanese Tier 1 and to deliver the next generation of digital cockpit. This is important because the way we are changing our way of delivering to the client and the solutioning. It is a platform which is ours, and we are delivering to multiple OEMs of the Tier 1 through this platform. And right now, we are engaged for 3 OEMs and it will go to 5 OEMs. So, I think that is how we are delivering. And these two engagements are important -- sorry, two OEM programs underway and more to start shortly. So, this is a very important part. And again, here, we have used all our experience of so many years and so many production programs in digital cockpit area. And also, of course, we have used AI in terms of accelerated development. There are -- I had some chat in 4 million people were asking about where the spend is and et cetera. So, first thing I must tell you that this is only a limited part. I've just picked up a data for only automotive part and also outside China because that is the data which is available. Beyond this, there is a Chinese data spend. There is also -- of course, this does not include off-highway commercial. This does not include micro mobility. But still, there is at least the good representation of automotive spend. And this is from the Mackenzie Jan 26, their internal data which they collected. If you really look at which are the pockets, they still -- I mean, they're talking about 2x growth in 2030 -- by 2030 into the spend, R&D spend. However, I'll bring to your notice two things. If you look at the areas where they are going to spend, one is the AD ADAS, which is becoming 3x the spend from now till 2030. AD ADAS is the largest spend area from that perspective in terms of growth. And the second area, if you look at it, is the infotainment and digital services that is there. And E architecture, it's a relatively smaller part, but that is again moving in a big way. Integration validation is existing. It cross -- many times; it is across many spend areas. It's the largest area of spend anyway, otherwise. So, these are some of the spend areas. Now this will spend on Gen 3 and Gen 4 programs. These are the architecture type you can look at. Now automotive software spend remains strong. That's the one thing I wanted to say. Second thing I wanted to say that this is only -- as again, repeating, it is only automotive part. This does not have off-highway commercial. This does not have Chinese data and other things. And beyond electrification, there is a high growth in other domains. So, electrification is not the highest spender. I just wanted to bring while I mentioned to you last year also, we have grown into powertrain or propulsion area. There are multiple shares. It is not only electrification which drives it. But beyond that, actually, the spend is here as you could see in the earlier, our highest growth was in infotainment, connected and security. The second part I wanted to cover is in the case of AD ADAS, even though this spend is 3x, I must also say that this is not necessarily something to be available market to us fully because of two reasons, because this is where the companies may source platforms from the companies who have built a platform. And there are very few now because this includes billions and billions of dollars to really build a platform. And so, I think -- but as you know, always, the -- actually, the validation simulation is a very, very big part of it. And that is always a very big part of any implementation, and that is what is available to us. I just wanted to explain to you from your understanding how this looks like. E architecture, I talked about it. It will go when the new vehicle programs will come. E architecture will become important. It is important for all of our off-highway and commercial vehicles segment. Now you all know about the trends, but for a very quick tariff and geopolitical conflicts, EV policy changes in U.S. and Europe, supply chain disruption, rapid maturity of AI technology. Impact on OEMs, multibillion-dollar write-off. One of the questions people ask is earlier, we had much more clearer view of how the growth will be in the next year. And then a little bit, we have said that this is where there will be growth and this is where there may be -- there will be the programs will come to end. One of the thing is for one of our clients, and I'll tell you, it is a public news, Honda, they basically canceled all their new platform programs. And that had an impact on us. And it was very recently because it happened in the April month and -- for us to understand the impact, it took us some time. So, there are some things which happen, and that's why we also decided that we'll have a more broad-based strategy, which we have been working. It's not that we will work from now last two years, and Sachin will, of course, talk about it. Then loss of market share in China and growing Chinese presence in other markets. Many of the OEMs lost in European OEMs lost their Chinese market drastically. And this is where they were making money also earlier, luxury OEMs. But I must tell you that they are coming back to some extent, even though their margins are less, the last few quarters, there is a recovery in many of those. But this is what happened for last -- most of the past, last couple of quarters, it has come, pressure of margins. So even though they have grown, the margins have gone down. And an R&D budget, I told you about how it changes. Again, I must tell you that AI budget is not considered in some terms of pure AI technology. Naturally, AI into those domains is considered there, but AI by itself is not naturally considered part of it. And impact, delay in vehicle programs, I talked about it. Most of the programs, most of the programs are delayed. It has two impacts on it. One impact is architecture part is something which got postponed, which we have really positions us well, which will come to -- which is very important, will come handy. And as I said, it is also important for off-highway commercial. Then the second part is integration revenues will increase actually. I must tell you that whatever we have a visibility, my experience tells me that there will be in the next 2 years, a demand which we don't see today, which will come when the vehicle will get into actually the market because the integration problems comes when actually the vehicle is launched. Right now, many of these programs are delayed. And at that point of time, they need something which is a proven partner and a solution. So that is the -- both are the impact of delay in vehicle programs. Near-term revenue moderation, but robust outlook in medium term. Early more in software-defined machines for trucks and off-highway, I talked to you about that. And traction in autonomous L3, L4 programs, digital cockpit and aftersales -- and we made some -- see, earlier, we had made investments in aftersales. We made one investment into another company in California, right, Hell last year. It's a small investment. But the idea is actually to build this kind of expertise. So, when we go for the integration, we go for the implementation, I think we are in a better position. And also, when off-highway commercial when we are building the solution, we can have a little better preferred relationship with some of them, while we work with all the stack provider. It is not actually we provide -- we work with any stack provider. So, these shifts are there, but midterm outlook remains strong. What has been the KPIT response? So, this is something which we have been working already for 2 years. It's not something we are looking at it right now. First is faster growth with solution products. We believe this growth, we expect to be 30% on this, even though it's a small part, as we said, initially, we start with 20%, 25%. We'll grow with 30% plus growth rate in these solutions and products. Expand into adjacencies and new geographies. And I don't want to talk everything about it here. But we are looking -- we already had off-highway commercial, which has been pretty successful for us. We also have built a micro mobility. And I don't have a clear data, but I can tell you that by 2032, it will be a very big part of the business, micro mobility, and the new geographies. So, we believe that -- we believe in India, India growth story, which will be #3 market. And I truly believe in the next 10 years, it could be #2 market in the world if we are on track. So, I think then Middle East and other market is there. And of course, Asia, Vietnam, China, all these markets are there. So new geography. We have made strategic external investment of $400 million in M&As. And I will tell you later how it actually stacks -- create the full stack story and how the technology investment. So, this is beyond the 5% I talk about. And this is -- so if you really -- these are not included into the investments we have made in technology, and that makes us really the most preferred partner, and I'm sure you have seen the quote from Priya, CFO about this. I mean he talks about that they really know the game. So, I think this kind of experience, this kind of a thing has come based on this kind of investments. Continued investment in R&D, 5%, which I said, which is on top of this. And this is a very, very important part. As Gaurav is here, we had -- when we started our journey about -- a few years about AI, we actually had a separate organization build this technology and then take it in the company. But -- so first is we build a core technology, core stack, and we will talk about it. So, the product, this is what we call automotive mobility intelligence product, Beacon for AI first development integration validation. We are -- this we use for two things. One is AI-infused solution and also as a product because when a client will adopt it, his employees will also use that. So, we will be in a position to license also the product. We will also use it wherever we are delivering services. So, there are multiple flexibility in which we are doing. Here, we have tied up with some -- really some of the tech companies. And I think we had one announcement from Microsoft part of this at the time of CES, but there are a few others. So, I think it's a very, very important part for us. And the last but is the ecosystem of complementary partners because if you have to take the full ownership, we don't do everything, but we have to build an ecosystem. Now if you know the China benefit over many other companies -- countries is basically the ecosystem which they have built. So, if you drive your ecosystem, your innovation is fast, you can give the full solution, which is very important. So, we have a clear-cut focus on ecosystem of complementary partners, whether it is semiconductor companies, it is specialized Tier 1s or specialized software stack providers. So, I think that's the kind of ecosystem which we have. So continuous rigor on what this will mean is continuous rigor on wallet share expansion and expansion into new geographies and adjacencies. We have about 10%, 11% market share. I mean I talked about it earlier. And we believe there is a much more headroom for us in terms of growing in the existing account. Beyond that, there are new accounts. Beyond that, there are adjacencies. So, I think these are the areas where we can really make. But these are the investments we have made. That's what I wanted to come out. These are the significant investments we have made. As much important is people. Why I will tell you? Because the disruption is not only one time. It will happen. So, we want to build a really agile organization. And this agile leadership is going to be very important in the mindset. And whether it is even the AI adoption in the -- how you will use the AI for the client, -- apart from that, overall, how will you face different parts of the issues which may come, whether it is geopolitical or technical disruption. So, it's a very important part, and we create -- we identified about 60 roles, which are going to be critical, very broad-based, which are going to drive the organization. And this is the first batch where we have looked at about 40 people, 40 roles where we went through an exceptional program. This is completely designed by us with some partners where we took all the team to China they actually drove the vehicles. They actually went to all the OEMs. They went to the -- they had interactions with the government. Then they went to California, where they saw -- they went to NVIDIA, they went to the university, they went to the AI start-ups, they looked at it. And then we went to France and where we had the university interaction. So, this is from NCR campus where we had some -- also Mackenzie has been our partners for this too. So, a very, very rich program to really change the mindset and look at the world differently. My one thing I will tell you, my take on that, and which is very important for our industry, for KPIT and for India. And that's why it is very important is -- if you take last 150 years, 200 years history, there's a direct correlation between investment you make into technology and the growth you will have in future sustainable. So KPIT, that's why continues to make that investment, which is very important to drive the growth for today and tomorrow and for future. So that is what it is. And I think this is, as I talked about with the AI engineers, AI champions, engineers, research partnership upscaling. This is -- we are basically building MTech PhD combined programs with Premier Institute for research. I think this is all going to be very important for us going forward. So, we are making a lot of investment into this area. This is one area where we probably must be investing highest in this -- in this industry, again, as much as the technology. So, this is this investment we talk about proactive investment across chip to cloud as we talk about. So it's -- we -- I mean, it doesn't mean that we are only doing an acquisition and investing into this area. But we have some work and then we actually complement it with some of the specialist players. So, this chip, which was a partner architecture, it's a Technica, middleware is a CoreX, application is Helm.ai, cloud, you can say Indream and Sid solution. And these are the horizontal which go across. It is Caresoft, Technica validation. As I said, validation is a large part of the spend today, and it's also something which is continuous. And it is going to be very important because one part, if you ask for difference that why China can deliver a program in 2 years or less than 2 years versus 4 years, what people take is one of the things where you can really reduce is time is the validation. And that's where we have some very, very special offering, which you can see it better. And recent is the cybersecurity signMotive. Again, it's -- we believe that what was important to us is having a cybersecurity solution in the vehicle, which is being used, multiple vehicles, millions of vehicles. As you know, the carrier is an investor into this company. So, in Volkswagen Group, there's millions of vehicles where signMotive solution is there. So proactive strategic investment across all their chip to cloud stack. So now I come to Anup for the technology moat as we call, what is that differentiation? What is that KPIT is doing in this area?

Every time we talk about KPIT, we talk about software integration. Many people may ask what integration really is and why KPIT keeps talking about it. So I'm going to talk more about that in terms of your understanding. So -- if you just focus on this part, look at each car as a software component, right? So, each car is a software component. What happens is software developers design these components. That means they have a car and they start riding on a very open free, just freshly open highway, straight patch, missing link road. And they go at 100 kilometers per hour, they think their component works because it rides at 100 Kph. And then this happens. They come to a junction, largely unruly problem. Many software components come into picture. Each software component, the driver is different, the attitude is different, the car capacity is different, the condition of the car is different, and then this typically happens. So, this typically happens in any context in automotive. Automotive is a very complex machine. It has got about 100 to 120 computers, 5 or 6 different types of networks. And all of these have to handshake with each other in real time because sometimes, obviously, when you press a brake, you want the braking to happen. When you want to -- when you turn the steering, you want the steering to turn. So, there are real-time issues, there are safety issues. So overall, it's one of the most complex machines in the world. The second thing is, okay, so if there is a complex machine, what is the problem, right? When you look at the latest semiconductor technologies, all of you must have heard about GPUs that are used in AI. You heard about NVIDIA, Blackwell, latest SoC. Do you have an idea of how much it costs for that one single big chip, approximately $35,000. That is probably more than the cost of the car. Now when you talk about giving infinite bandwidth in car, that is not possible because I'll give you an example. The second bullet point talks about a $300 billion company, let's say, the sales are $300 billion. Margins are very small, 2.5%, 3%, sometimes maybe 4%. So $7.5 billion of net margins. And then let's say, there is an opportunity of saving $10 per car. and that you multiply by 10 million vehicles, that becomes suddenly $100 million saving. So, a car company cannot think about even spending $1 more or even $0.50 more, negotiations are done for that per car. So, if you can reduce even $1 per car, that is a great opportunity for extracting that money in the bottom line. And that is why a car is always a constrained environment. Everything inside the car is constrained. It is the most optimized version. And when you want to do optimization, you get into situations like this. You get into integration issues. And that is the real main work that we do in terms of making sure that the car is optimized very well in terms of what it has to do. So, most of the chaos that happens, the programs get delayed. When you hear about delay in programs, it is because most of the software engineers start driving at 100 KMPs per hour. And they soon hit a bottleneck like this. And this bottleneck is absolutely unresolvable. And that is where we come into picture. And of course, there is also complexity. Not only it is to be optimized for that car, it is to be optimized for probably 15 different models of the car because you can't keep on engineering differently for every single car. So, some large OEMs who have huge number of models every year, they launch 10, 15 different car vehicles, car models is similar -- exactly the same component needs to exist inside and then the scalability has to be up, down, sideways, all those things are there. So, it becomes even more complex because of that. So this is what our real work on value addition to the customer is. So, what do you do when integration problems happen? Of course, you can do something about it before it happens. So, what is the proactive way of handling it. And then there is, of course, once you get into a problem, what do you do? You keep on finding the problems, you diagnose the problems, you fix the problem. So there is something that after it happens. Now mind you, the traffic jam is very easy to see for very, very unskilled person to actually observe and find out where is the bottleneck who is the car who's actually blocking everything, which truck is blocking it. But in software, you can't see anything. So, you have to observe by different ways. And some of the things today demon today that we are talking about is actually talking about the observability. How do we look into something that happens so fast. It is so critical from a real-time perspective. Microseconds are important, milliseconds are important. How do you observe these things? How do you find out the problems? And that is what we do also. Next question you might have, and I had many questions before this session started. What is the AI impact? How does AI really help? Of course, AI helps. AI improves software productivity, worst case, 10x, best case, maybe 50x, 100x. So, what do you do? So that means you create an 8-lane highway. Here, there are 6 and everybody drives very fast and again go to the same bottleneck and hit it there, okay? So, AI is a fantastic way for generating a lot of software. So today, if you could generate 10 million lines of software, you'll generate 100 million lines of software. And then you are left to finding problems of 100 million lines of software inside the car. So, the problem increases tenfold, probably multifold, not just 10 because the order of magnitude is not linear here. You are probably talking about power equation here in terms of complexity getting created. okay? So that is what we do. Now let me get to you -- again, this is -- you must have heard about software V, okay? And if you look at this outer light purple thing, it almost looks like a V. It is looking like a more than a V now, but that is actually the software V. But in a vehicle, you come from a requirements V because even the requirements have to be validated. So, you can observe that inside the big V, there are these small Vs. And each of these Vs, the left-hand side of the V is called a development side and the right hand of the side of is called a validation side, okay? So even the requirements are validated. There's a way of validating a requirement. I write something, I validate it. Is it ambiguous? Is it traceable? Is it testable? If I write a requirement that is ambiguous, it cannot be implemented. If I write a requirement that is not testable, nobody can verify it whether it is written correctly. Each of these V is important. There is a -- once I write the requirements, am I actually implementing the right platform? Is my network architecture correct? Is my system architecture correct? What is my requirement? And what is my verification and validation for that? Then you come to something called as a future development, the purple Vs that you have. software developers do these features. They write the features. They test the features locally, the highway driving at 100 KmPH. And then you come to integration and regression, when you come to the roundabout where traffic jams get created. This is a traffic jam. This is how you need to first verify whether your platform is working, then you keep on adding the features on top of it. And then you -- every time somebody adds a new feature, his feature has to be tested with 300 other features that already exist inside the car, and they are actually hand checking, discussing, exchanging data with each other in real-time. And sometimes this real-time break, sometimes something doesn't work. So, you'll see in your modern car, sometimes things don't work, okay? And they work -- they don't work intermittently. You're lucky if it doesn't work consistently. Sometimes it doesn't work intermittently. Okay? And these are the integration problems that we are talking about. And once everything is done, then again, there is a standard validation cycle. So, you have things that are tested in labs. And in labs, there are 2 stages. One is called a domain system hardware and loop testing. Then you have a multi-domain testing that happens. So, car infotainment gets tested with ADAS and then all of it gets tested with chassis. So, it's called multi-domain, but it is in lab. And then you have mule vehicles. I tried to simplify this diagram for you. It is not that simple, okay? So, it is very, very complex cycle. And then you have a start of production and then you have an aftersales section. So, your car is in the field and you need to be serviced and all those things need to happen. So, what at KPIT, we have been doing for so many years and what we have done is you can take a look at different coverage areas of KPIT. And let me explain. So, on the top, the orange color or whatever color that is, there are many ladies in the room, closer to orange. So that is actually the platform approach. So, there are different platforms. Platforms are things that do most of the dirty work inside the car from a hardware perspective, but they are not as glamorous as the applications that you see in the front. So, you have the applications are what serve the users, that is you who drive the car. And the difficult part of what the applications should actually make happen inside are the platforms, okay? So, you have platforms. Then we have beacon. The reds are all the AI accelerated work packets that we will call it, I mean, in terms of software. So, you can see, if you look at this diagram, I had done a left-hand side and the right-hand side. So you will see the red occurring here. This is the AI that is going to eat up the software development part, the digital part. Then there is a little bit of red here also, the AI part here also because even when test verification is done, large part of the verification to be done is also software, okay? So validation also done. And then you have -- I talked about what do you do before, what do you do beforehand? Everything that happens on the left-hand side, a good automotive platform, a good AI infrastructure, a good virtual validation. So, if I do not have the hardware for testing, how can I emulate the hardware, simulate the hardware, whichever word you feel comfortable with. How do I actually simulate this hardware so that even if the hardware is not there, and I'm still able to test the software that I write. It's called virtual validation. It's because it's virtual. You're doing validation virtually. Then you have actually real validation, but you have to do it across the board, even on the left-hand side of this bigger V. So, this is a development cycle. And in that development cycle, you're using AI, you're using virtual validation, you're using real validation and then you are accelerating things using automotive platforms, okay? And then you have an integration where you again have the virtual validation platform playing a big role. The SDV bench is playing a big role, the one that is in the back and then AI playing a big role. And then on the actual validation side, it's the real validation that comes into picture. And then after you get into the sales, you have an aftersales products that come into picture, okay? So, whatever I have painted here is now the portfolio that KPIT has in terms of what Kishor was talking about product and solutions. This is what we've been doing for the last maybe 4 years or so. From a Beacon perspective, I think, again, there are questions, and I don't think we have enough time to discuss in detail. But if there is more interest and Sunil can find that out, we can have a separate session on this is what is this AI? Why is this AI? What is the difference between GPT and CR and DeepSeek? And of course, there is difference. There are difference, a little bit of differences, nuances here and there. And then AI gets even more complex, whether when you want to use AI as a prototyping tool, or when you want to use AI as a production tool. production needs consistency, production needs repeatability, prototype needs experimentation and fun. So, when do you transform from experimentation or having fun to doing some serious work in terms of repeatable and where repeatable things in automotive, repeatability is also bundled with concerns for safety. That means traceability exists. Some regulations exist like ISO 26262 or functional safety. So how do you encompass all of this? And you might hear a few words that are happening at agents. Agents are the way of actually organizing a model, model is an LLM model. Agent is a way of organizing this model to do a specific task. You might also hear about a word called harness. Harness is actually used to extract a specific thing from the agent model combination so that you are able to get what you really want to achieve at a scale, at an engineering scale. So, what we have done is out of our experience that we have in automotive, what we understand, we are working across multiple domains. And then we took an early lead on AI in terms of how it is expressing itself, how the models are progressing. And what is the most optimum that our customers need from this in terms of putting up an enterprise together. Engineering organizations are huge. KPIT is a 13,000-plus people company doing only engineering for automotive. How do you organize 13,000 people together in terms of AI usage? How do you manage it? How do you address safety concerns? How do I make sure that my code actually doesn't leave KPIT? How do I actually create traceability? How do I track everything together? So, all these things bundled together are what Beacon has right now. And this is what we are using very effectively in terms of large-scale implementations that we are doing for our customers on the most complex programs. When I talk about the traffic jams, the traffic jams as the projects start becoming bigger, complex, unpredictable in terms of when they will get complete. And these are the problems that we are solving now. And we are becoming I mean, we have customer testimonials to tell us that we are getting better and better every day in terms of solving those problems. So, this is what our beacon, I will not get into details of what the features are, et cetera, because it can get more confusing. But this is our way of addressing large-scale problems that need AI intervention. And if you noticed, the red color is everywhere, okay? What it means is there are places where AI can solve pure software problems. But there are places where there is no software involved. There is a lot of electronics involved, hardware involved. How are we actually putting all of this together through AI is what is called as a harnessing. I mean making it work for the entire life chain is what we are trying to do. And this is what we are getting good at. Kishor mentioned about the inorganic effort, the companies, the joint ventures that we have. So here, we are talking about it's not just that. It is also about an investment that we are making, significant investment in terms of creating technology. So, if you look at the layers, these are the things that we have right now working in some form or other in terms of customer. And now we are supporting it with the AI harness that we have. And what it basically means that when we look at typically a company that does some great work in a specific area, let's take, for example, Technica, it is usually doing work with a few customers. And our advantage is that globally, we work with many customers. So, we basically bring that expansion. We try to understand how it can be expanded. We also try to look at how needs to be done more in terms of making it happen. How do you scale it globally, expand it globally across the markets that we have. And this is the work that we are currently doing. And this is the one that we intend to expand in the next couple of years. Again, same slide looking at it from a technology perspective. All the purples here are actually a result of all of this work that we have done. The black is organic that KPIT has for the last many years, invested and actually converted them into products or solutions that we are trying to sell, okay? Thank you very much. So, I call upon Sachin.

All right. So first of all, you can all hear me. I'm sure you can see me. I hope you can hear me, too. So, in our company, we have 2 functions, marketing and account management. There are about 150 people. Their primary job is to just translate what Anup presented to all of you to the purchasing organizations and large OEMs. That's what they do essentially and to get them to pay us money for something they cannot touch and feel. So, I just wanted to get that out to all of you. What I'll try and cover is walk you through our story over the last couple of years. And this story is about when you see certain things getting repeated, then you wonder and you try and fix them in a systemic way. So, we realize that these macro problems and micro problems are not going to go away. First, it was the pandemic and then there was a supply chain disruption and then there were tariffs and wars and now there is AI, all of that. So, 2 years ago, we said that we needed to build our organizations, which will become resilient enough to deal with this, right? At some point, you have to say it is part of life and you have to build your future based on resilience. And that's really our story. And let me cover some of what is it that we've been trying to do over the last 2 years. I think we have made progress, but there were some unforeseen punches along the way. We continue to roll with the punches, and we continue to make progress along these. So first is those of you who attend our investor calls, you hear us talk about our T25 strategy, 25 clients that we've been working with. And in all fairness, bulk of the growth that you saw of KPIT, phenomenal growth over the last 4 years, it was mostly on the back of 8 OEMs. And it was mostly with Anup just presented, which was largely in vehicle software, right? But there is a lot more to KPIT. And that means now first step that we have to take -- that we've been taking is to look at every OEM and their relevant spend to us. and see what does that mean and how do we go deep in every client and expand in a wide way. So, we've been looking at wallet share for the last couple of years. We know exactly where they spend and where they are not likely to spend and how much they spend on us versus others. And we have been doing it very diligently. And Kishor, I mentioned this earlier on. If you take the overall wallet share of KPIT among our top 25 clients is about 10% as of last year. That we grew by 10% to 12% year-on-year. Now the goal for this year is whether we can push that up to more than 15% to 20%. So, this is number one thing that we've been doing. And essentially, we are doing it through these 4 points that are listed out here. One is cross-practice offerings. Most of the things that you saw on the V-cycle, you can imagine that there are different practices on the KPIT side. There was a platform that you saw, and then there are different domains, whether it's digital cockpit or AD, ADAS or body or chassis, right? So, bringing them collectively and solving larger problem of the client. So, this is one thing that we started to do for every client now in a very conscious manner. The second part is all of the clients have constraints, too, they don't have the time and they don't have the money that they had a few years ago. Hence, the solutions and products come in handy. Doing business in a linear manner just doesn't make sense anymore, right? So how do we really increase nonlinearity for our clients so that we can shorten the time frame and secondly, also offer them cost-effective solutions without compromising our own margins. That's the second part that we've been talking about. And the third thing is when you looked at the V-cycle, it's a very complex cycle because there are from the OEM perspective, there are many parties that are involved in this. There is the chip layer at the bottom, then there is Tier 1, there are cloud players and so forth. So, it's a complex ecosystem. And what we have realized is if you have to solve the larger problem, we have to work with alliances to solve the larger problem. So, you heard about some of the conversations that we've been having with the chip makers like Qualcomm, some of the Tier 1s that we partner with, Kishor talked about one of the case studies earlier on. And last but not the least, the cloud players. And this has become -- this is something that we need to do more of. We've been a company that has been doing our own stuff and creating value for the clients. Working with other partners doesn't come naturally to us. So that's something that we need to get better at. But that's something that we've been very conscious about over the last 2 years, and you'll hear more and more about KPIT working with some of the other partners to create greater value for the OEMs. So, we believe that these are the 3 things that will help us to increase our wallet share substantially in the next couple of years. So, this is step number one. Step number two is to take an alternate business model. Doing business the same way just doesn't make sense anymore for most of the OEMs. So, the first thing we have done is we had quite a few time and material engagements with the clients. And what you'll see in our financial results, if you watch them quarter-on-quarter over the last couple of years, is a substantial shift from time and material to fixed price. That's something -- and this year, we have also made a significant stride towards fixed price. And the reason to get to a fixed price was that unless it's a fixed price or outcome-based, we cannot really apply our solutions, especially those that are infused by AI in order to create value. So, this is the first step towards it. What we have done is that more than 80% of our new contracts are fixed price in nature. That's something that we have driven very diligently over the last couple of years. And we are also in the process of converting our existing contracts that are time and material into -- and this is probably the harder part, winning new programs that are outcome-based is easier than something that you've been doing with the client for many years. So that's something that we have embarked on. We'll be converting 4 of our largest clients in that model in this quarter, and we'll take the next 4 in the next quarter. And that will pretty much take us north of 75% overall in terms of having outcome-based and fixed price. The second part is that there are 5 products that we have, and we see tremendous growth in all of these 5 products in the immediate future. And for those products, we have to look at different licensing models that make sense for the clients as well as for us. So that's something that we are doing. And the last part I already talked about, the services, they need to be in excess of 80% in terms of our contracting, the nature of contracting that we have with the clients. So step number one, go deep and wide in our existing T25 clients. Step 2: We've been talking about expanding. We've been very careful about adding new clients because we wanted to make sure that we do justice to the existing clients, go deep and wide, before we can add more clients. We have now built enough muscles, and AI solutions and products do help us substantially. So, unlike any other year in the past, we added 13 clients. That's a big thing for a company like KPIT, who's been very diligent about not adding clients. And they come across the 3 segments that we talk about. We've been talking about -- for the last 2 years, we started to talk a little bit about trucks first, and then we started to talk about off-highway. Very happy to say that we have added 4 truck OEMs to our list of clients, initial engagements, and they take time because we want to get into them in a strategic manner rather than getting into a dog-eat-dog kind of world. So, it takes time, but we have made a breakthrough in the case of 4. I think the success has been greater, and we've been actually pleasantly surprised by the response that we got from some of the off-highway players. Unlike the passenger car companies and the truck companies, some of the off-highway players are doing reasonably well. So, they understand they have the money. They want to invest proactively, and hence, the timing is working out for us. We have added 6 off-highway OEMs across 4 different countries now. Initial engagement, one of them is the big one that Kishor talked about earlier with one OEM in North America. And for us, I think this OEM is important, and the assignment is important. We did a consulting assignment for them. And based on that, they awarded us with the current generation program and also the next-generation program of software-defined machine. And this becomes sort of a playbook for all the others to follow in the off-highway space. Unlike passenger cars, where we have learned to understand the business quite well, not just the technology part, but we really understand their business quite well. It takes time to understand the business of off-highway because there are different applications. There is mining, there is agriculture, and there is construction, right, the 3 large components of off-highway. We are learning their business so that instead of going inside out, which is, oh, this is what we do for pass car, and this is what we have to give it to you, we are going outside in. We are trying to understand the business applications of their machines, looking at what the business KPIs are, and sort of altering the software-defined machines template for them. So, the first has created a really good playbook, and it's the same playbook that we are going to replicate to the other 3 that are in the pipeline now. The second part is -- so this is the growth strategy. There were 3 pass car OEMs that are really good OEMs. They were not our clients. I think we have made a breakthrough in all 3 of them. They happen to be some of the largest OEMs in the world, one of them in a very meaningful manner. The other 2 early days were very promising engagements. And once we hit all 3 of them, we would have covered almost all of the major pass car OEMs outside of China, all of them, right? So that creates our pass car story a little more comprehensive. The 3 that we have added, they are a lot more resilient to the dramatic changes that are happening in the pass car area, right? They're feeling less pressure compared to some of the others. So, I think that makes the pass car portfolio a lot more stable for us. The trucks, they have been going through a slump. Just the trucking industry, mostly in North America and Europe, has been going through a slump for the last 9 months. Some of it is just seasonality. Some of it is just political uncertainty. There will be a pre-buying that will happen in the second half of 2026. And we believe that the truck business will pick up a little bit. The European market, as well as the North American market, is likely to pick up in the second half of 2026. And the truck market was in a very simple manner, right? As soon as the construction and everything start to pick up, their business picks up, and that's when they start to spend money on companies like us. So, we do believe that in the second half of the year, the truck guys will also open up their wallets and embark on the software-defined truck journey for the most part. So essentially, the composition of T25 is changing along with this. A, T25 is not really T25 anymore. It's a lot more than that. And secondly, T25 had most of the OEMs from passenger cars. Now the new T40 will look a lot more balanced across the 3 industry segments. The 3 industry segments usually have 3 different cycles. So hopefully, we'll be able to reduce the variability in our business, and we'll have a -- far more balanced growth going forward. So, this has become sort of our horizon 1. Now and here, let's go deep and wide in each of these accounts and create tremendous value for them. Horizon 2 is actually micro mobility. Micromobility, we started working on it a long time ago, actually, but we sort of decided to park it in between for about 6 years. And now we are reviving micro mobility because we do have the mind share and the bandwidth to make investments in micro mobility. And we're going to start micro mobility from India. And I'll talk a little bit about what that entails in the next slide, and Horizon 3 is what will also cover. Horizon 1 is now in here. Horizon 2 micro mobility is basically for tomorrow. What's in it for us? There were some questions before we started the session about whether we'll get into other areas of mobility like aerospace, locomotives, and some of the others. So, we do have an answer for that for you as well. The third lever is actually growth markets and focus. This is really important from our perspective. And we'll talk first about India for India. We are headquartered in India, but our business in India has been very, very low over the last 30 years. This is going to change now starting this financial year. And there are 3 things about it. Number one, the Indian OEMs are truly becoming competitive, not only in India, but by global standards. You've seen that. Number two, the global OEMs have started to take India a lot more seriously, and they want to build India for India products here. Some of them have started to see a substantial loss in their market share in China. India is the next big market. So, they are looking for India. So that creates an opportunity for us. Third is there are companies in India, conglomerates in India, that want to get into pass car business. And the best way for them, -- the fastest way for them to get into that is to buy platforms from China. This is something that has started to happen. We are involved in about 3 different conversations about the same. It also creates an opportunity where we can bring a platform from China, a car vehicle platform from China, and sort of help the Indian OEM get into production faster and be the software and system integrator for all of them and validate what Anup talked about earlier on, right, to put the vehicle on the road. The last but not the least part is as the Indian economy grows, trucks and off-highway as the network of infrastructure improves, trucks and off-highway will become more and more relevant, and I think we are ready. The name here is, I think, the traditional services that we've been able to sell in markets like Germany, North America, and Japan; they are not going to be the same here in India. So, we'll drive growth through solutions and products as well. That's about India. The second part is about China. We've been talking about our presence in China. We have had a presence for more than 15 years. Two years ago, we decided to revamp and refresh the presence that we have with 4 objectives: Number one, go there to learn from China and bring those learnings to our global OEMs. That's something that we've been doing. Omkar and Anup both spent a substantial amount of time with our team in China to capture those learnings and apply them for the OEMs outside of China. This is step number one. Step number two is to work with our global OEMs who have a presence in China and help them salvage their market share. And I think there are going to be more and more opportunities. You see companies like GM and Volkswagen Group making a comeback to some extent in China. By launching China for China vehicles, which are market-ready. So, the second thing is to help them remain relevant in the Chinese market. The third part, which I talked about in the context of India, is to take China OEM platforms or help Chinese OEMs become successful outside of China. You all know there is intense competition. China is a 30 million passenger car market, and there are close to 100 OEMs, after 50 that have gone bankrupt. So now we are left with maybe 99. So, it's a crowded space, brutally competitive. So, the Chinese OEMs have no choice but to look outside of China. And there is a role that KPIT can play to help them penetrate into some of the other specific markets. That takes me to the third part, which is Southeast Asia. India, China now and here. Southeast Asia is for tomorrow. Whatever we build in India in terms of our offerings for micro mobility, we are going to take them as well as our solutions to Southeast Asia. And why do we bring up Southeast Asia? Because there are very few OEMs. There are a couple of them in Malaysia. One of them is owned by a Chinese. There is one in Vietnam, right? It's not just about that. China also is looking at countries like Vietnam and Thailand as its gateway towards the rest of the world, right? So, you'll see the presence of Chinese OEMs increasing in Vietnam and Thailand. And that's why we believe that our learnings from India will be a lot more applicable to countries in Southeast Asia. Last but not least, we are not just thinking about today and tomorrow; we are also thinking about the day after tomorrow. And the next market, the next horizon of action and activity, is going to be in the Middle East and Africa. And we are already thinking what it means, right? The offerings that we have for the developed world are different than the offerings that we have for India and China. Similarly, the offerings for Africa are going to be very different, but they're going to be built on the back of the offerings that we'll create for India. So that's something that we'll look into the day after tomorrow. So that's really from -- a geography perspective, that's really our Horizon 3. This is looking at adjacencies beyond the 3 segments that we talked about. Number one, pass car more than 75% of our business continues to come from pass car today. Second is trucks and off-highway picking up quite fast for us, and we remain quite bullish. However, we started to look at micro mobility, and we have Pushpahas here. He's running micro mobility for us. We have sort of revived our focus on micro mobility after taking a break for 6 years. And this is about looking at 2-wheelers and 3-wheelers and the last mile connectivity, where the real opportunity is not only in terms of creating efficient propulsion and vehicle engineering design, but the aftersales products and solutions become very relevant to them. So that's something that we started to work on. We signed a partnership with Hero Motors recently, and that's our great way of really getting a firsthand feel for what this looks like and how we can take it to others in India and beyond. The question now is what deep tech. Deep tech is something that we are sensing and scanning at this point in time, which is really our Horizon 3. And this is where the rest of mobility, we are trying to see what are the areas where we have core competencies and how they can be made relevant to these new areas. Now deep tech, you can talk about robotics, you can talk about aerospace, you can talk about space tech, any of these areas within the realm of mobility. We believe that many things that we do from a technology perspective are relevant to them, but it takes time to understand what that market is all about and what their KPIs are. And most importantly, what is that compelling reason that those OEMs would want to work with KPIT. So, this is something that we need to figure out during the course of this year and next year, but pretty soon, we'll be getting into some of these areas. So, this is another flavor that we wanted to give you in terms of thinking about 3 horizons in terms of the geographies as well as the market segments. Now the next question is, okay, this will bring back growth. What does that mean to the bottom line of KPIT? And in our -- we have provided directionally that we'll be able to hold on to our EBITDA in the immediate future. In spite of the headwinds, we'll capitalize on the tailwinds that we have. But more importantly, in the mid-term, we want to increase our margins. We are very clear about that so that our ability to invest -- continue to make investment in the future technologies remains valid. Here are the levers by which we are improving our efficiency overall. So let me start with the last one first. Over the last 3 years, consistently per person revenue and per person contribution for KPIT has gone up. And we believe that it will continue to go up in future. That means there can be a tremendous cost leverage in terms of overall efficiency and improvement. This is going to be one of the most important levers in future. Now I'll go in the first through 4 sort of a sequence. Number one, I already talked about why it's important to get into outcome-based model, right? We want to get into outcome-based models so that we can help our clients get to their production program faster, cheaper and in a more reliable manner. And we can also free up their bandwidth to do other things that are relevant to them, right? Whereas we take care of delivering entire software very well tested, integrated on the road for them. Second part is Anup talked about the set of solutions. I forget which color it was on Anup's presentation, but we have a whole bunch of solutions that we have built. And essentially, they create tremendous value for the clients, and they also shorten the time frames towards production for our clients. So, more we do, greater benefit the clients get without compromising our margins. The third part is we already talked about products. They are sort of the backbone. Anup actually demonstrated the V-cycle. The V-cycle also has AI infrastructure. There are set of tools. There are also KPIT tools from Technica and KPIT's own tools. So, we are not just limiting ourselves in this case, to the software part, correct? It's a complete V-cycle solution that we take to our clients. And then in the new markets, whether it's India, China, Southeast Asia and Africa, unlike the Western world where we started with services and then sort of we are in the process of graduating to solutions and products, we'll take the products and solutions first approach to the new markets, starting with India, Southeast Asia and then in Africa, right? And that means it's going to be a lot more cost effective for the buyers and a lot more profitable for KPIT. So, these are the 5 levers by which we believe that, that will give us the ability to continue to make tremendous investments in the future of our technologies, at the same time, have profitable growth for our company. Switching gears a little bit. And I wanted to take a couple of minutes to talk about -- while we love to talk about the technology that we bring and the difference that we make to mobility, we are also very proud of our vision. When new beginning of KPIT happened in early 2019, it took us about 9 months to come up with a vision. We involved about 300 people to come up with the vision of the company, and we came up with the vision of reimagining mobility with humans all of our stakeholders for cleaner, safer and smarter world. And one thing that we are 100% proud of, among other things, is everything that we do, each one of us, all 13,000 employees across the globe, we help our OEMs make their vehicles cleaner, safer or smarter. So, we are very proud of making our vision the reality. We live it every day, and we are in a very fortunate position to be doing that. However, it's one thing to have the vision and align your business model towards the vision. I think that's something that has happened really well. From a sustainability perspective, we needed to do something more. And for that, we launched EcoVoyage, 2 years ago with very specific ESG-related goals. And we have actually signed up with science-based targets now. And we are committed to being a net zero organization by 2050, but there is an important milestone that we will hit in 2030, which is reducing our own carbon footprint by more than 40%. And we have already made tremendous progress towards it. So, this is one part. On the environment side, that's what we have signed up for, and that's what we will do. And we are pretty sure our -- when you put in science-based target, it's cast in stone. So, we just wanted to give ourselves a little more space by signing up for 2050. Our internal goal, obviously, is to achieve it before 2040. We'll see how it goes. Anup and Gaurav with AI have created new complications for us. So, we have to learn to deal with that. On the social front, I think this is something that we've been doing since the beginning of our organization. We've have been committed to the social causes anchored on 3 Es. It's environment, education, energy with employee engagement. That has been our CSR sort of tagline. And all the work that we do has tremendous impact on the environment. We also take a lot of initiatives to educate people right from school going kids to college going to PhD programs. And that's something that we continue to do on a large scale. And just having targets related to environment and social is not good enough. You need to have solid governance to lead with that. And we have created, a, we have made commitments. And secondly, we have put a stringent governance to make sure that we are staying on top of it. This is what I wanted to share with all of you. I would love to talk to you about midterm outlook, but you may want to hear this from Kishor. So Kishor, back to you. Thank you.

I will also get claps at the end of this. So, this is what we had talked about FY '27. First, we have to say that it's a positive environment in FY '27. I must say that all across, we are seeing a good traction. I think we have some road, a little bit of a few issues to tackle in the early part of the year, but we are seeing a very positive environment in FY '27. Two of our largest SDV programs coming to an end, but the revenue will be largely compensated by growth in newly acquired accounts. So that's the second part I want to consider. Continuation of this program would have resulted in 4% to 5% sequential growth for the year. So, you can just say we would have in a very, very good situation. A little bit now, it will get compromised, but I just wanted to tell you the kind of growth we are creating into new accounts. Solid growth is expected from trucks and off-highway, U.S.A., India. India, we will be almost doubling. It's a small base, but doubling the revenue and China, which is also, again, have grown reasonably well. Connected vehicles, aftersales and autonomous driving, which we are expecting growth, which these are the areas where we will have substantial growth. We expect 30% year-on-year revenue growth in solutions and products, and we hope it will increase over the period. This is very important because this will drive the profitability also, as Sachin mentioned, it will drive profitability. EBITDA, 20.5% to 21.2% post increasing investment in AI solutions and products, competency development and new markets. So, we will increase our profitability. We have just given a range because the currency movements, et cetera, we really don't know what happens and it has a reasonable impact. This is about FY '27. In mid-term, we believe the growth is driven by wallet share improvement in the current account, new account wins, which we are very, very -- they are very promising and expansion across new geographies and adjacencies. See, I will tell you one thing. We will pick up an adjacency, Sachin talked about it, where we can really pivot our automotive life story in the next 4 years. And this has to be an area which is of a high spend in a really tech-enabled area, very tech-enabled area. And we have -- we will only go for leadership. We'll only go for the leadership in the medium-term. That's what we are used to, and that's what we will go for. We have opportunity for annualized sustainable double-digit growth. And I can tell you that I've been a little -- we want to be -- make sure that we do not want to overcome it. We have generally done this. We will be in a position to -- we believe that the opportunity is big. And if a little bit of a help from environment, we can significantly grow in years to come, again, go back to the old days. 50% revenue share to be achieved from solutions and product. This is very important. And see, the revenue part, which is in FY '26, which is 85% of our -- this 15% is solution and product, which will move to 60% in 3 years, and this is in terms of 40%. So, we expect the EBITDA to be between 22% to 24% from where we are today. So, this is what we are looking at. We do believe that we can bring back significant profitable growth in the medium term. Medium-term is year after this next 2 years, next few years. And we can again go back to the way we are more familiar with and build a much larger canvas for us growth, not only for next 2 years, but much longer time. That's what we are looking for. And this is what we have. Thank you very much for the time, and we'll take questions.

So let's begin with our question-and-answer session. Can we please begin with you, sir? You can introduce yourself.

Chandramouli Muthiah from Goldman Sachs. Thank you very much for the detailed presentation to all the members of the management who presented. Very useful insights to understand the journey going forward. I have 3 questions. The first one is just on this pivot on your sort of slide on the industry that mostly incremental spend over the next few years might be in the AD, ADAS space. And KPIT in the past has had a reasonably good share of its own revenue come from AD ADAS. At this stage, it looks like most of the spend on AD ADAS, the big spend is happening with the new age OEMs, VMO, Tesla, some of the Chinese OEMs, some of the Korean OEMs. So, I just want to understand amongst the legacy players, which is your key focus, how AD ADAS will progress in that context? Will majority of the spend be with some of the new age OEMs and how KPIT can lever itself for that opportunity? Second one is just to understand the 4% to 5% sequential growth opportunity through FY '27 if there was no ramp down in the 2 large programs you spoke about. So, at this stage, KPIT is close to a $750 million kind of revenue organization. So, I just want to understand on an annual basis, what is the gap in revenue that has to be covered with these newly acquired accounts to do the growth aspiration that you might have for the year in FY '27? And the third bit is just on the 22% to 24% EBITDA margin range. What are the drivers of that transition from the current sort of mid-20% 20.5% kind of range to a 22% to 24% range? Is that more to do with products and solutions being a larger share? What's the difference between products and solutions versus what the legacy business is in terms of margin opportunity set? And what role does AI play in that sort of transition? So those are my 3 questions.

So, first thing is on autonomous part. I will take it from there. So, it's for every client. For example, any legacy OEMs, which they have built the solution, they have been in a position to go to Level 2 or 2 plus level. And now they have to move towards that. And there, they have realized most of them, they have realized that they will have to source from, they will have a different partner. Like, for example, if you talk about Chinese or that part, there's a player called Momenta. If you talk about other players, I mean, we talked about Colindres [Foreign Language] we have this, there are players in Europe. So, these are this. I think we as I mentioned earlier, the main opportunity for us -- first, so this is an opportunity across the OEM. That's where the spend I said it will accelerate. Last few years, if you know, it has slowed down the autonomous area. So, it will accelerate. And our opportunity is in terms of validation and simulation and what we get. There are a few things we are demonstrating how things will work also, how we will do it. But that will be the big area for us. And also, of course, some of the areas we can add to that. The second part is off-highway and commercial vehicles. They are looking at also autonomy. And so that is another area which will be the area of growth. And so I think these are some of the areas. In some new adjacencies we are talking about, there are also autonomy opportunities. So, these are -- I hope I have answered the question whether it is this. Just to tell you, we do work with all these companies, including Momenta. We also sell our products to some of these companies. We also work in their implementations for other plants. So, we already have that experience this kind of. That's the first question. The second question I will take and I will come to this is the margin. The margin growth will come through, as we said, we believe that we will be in a position to increase our gross contribution significantly through our approach of solutions and products. Of course, the products typically the gross margins will be much higher. The solutions also the margins will be higher because we will have our own, I would say, we call it PTAs. We have the assets, reusable assets, along with the AI-infused solutions, we will be in a position to really improve our margins substantially. And that is really the way we have built the organization within the practices we have. So, with that, we will be in a position to improve the margin. So that's the first part. The second part is, of course, the business model change, which we will do and which is becoming more fixed price AI-infused solutions. So, these are a couple of areas. which I can call out. And there maybe I mean, as Sachin mentioned, we will be using AI internally so we can have efficiency in terms of SG&A and all that. But I think these are key drivers are the first 2 I talked about. The third area, you asked me about 4% to 5%. I just mentioned this about this year that because this was a big program, this is a big drop for us for the first half of the year. And that will be a significant part for us. So, you know the calculation, right? If it is a 4%, what the 3% to 4% if you look at our quarter revenue. So that's something kind of an impact we will have. And we will try to first cover that and then later on go beyond it.

That's helpful. Just to clarify that. So, 4% to 5% is 4Q to 1Q. And once you sort of lap that, then that's sort of behind you for the rest of the year, is that?

I mean it will be I mean, so there are 2 things I want to say is these clients, we already have more pipeline. we are going for some more work. The only thing is there is a gap. It's not that this will stop and then we will get that. Also, at some point of time, they will look at the new architecture, new production programs, other parts. So, we have those kind of engagement. They may not exactly be equal to the kind of a drop we have. But even these clients, we have more business to cover. So first is something we will make up by that. And the second we will make up by the new clients, which we have.

And then just the other follow-up question I had is just on the current state of spending. I think, Sachin, you mentioned there's been challenge after challenge over the past 4, 5 years, which you've sort of tried to manage through. And in the current environment where there's higher oil prices globally and then the automotive companies in certain geographies might have some shortfall in cash flow. What impact does that have on maybe the near-term in terms of when they choose to reopen the versus on broader futuristic R&D and spending?

We have not seen the impact on the OEMs yet because of the conflict that we are seeing at this point in time. We'll see when it gets resolved. I think if it continues beyond 3 to 6 months, it will have repercussions that will be macro. At that time, we may have to think about it. But today, we are not in any of our conversations with any of our clients, this is not coming up. I think they are solely focused on rationalizing their costs and creating funds to invest into the future program. And I think that's what they're solely focused on. So those conversations are not coming in. it may impact the truck business faster than the pass car business if this continues beyond a period of time. So we are watchful about it. All our plans are watchful about it, but nobody is taking any actions as of now.

Got it. And just lastly, there was an interesting presentation on the India opportunity, Global for India, India for India. I think you've already announced an engagement with JSW Motors, which potentially comes out with their first vehicle for India later this year. So, I just want to understand today, what is India as a percentage of your revenue? And in your journey over the next 3 to 5 years, where do you envision this as a contributor, just given that a lot of the new EVs, new hybrids that are coming into the Indian market are pretty software intensive.

Right now, we are about 4% of our revenues are from India. And we they will increase substantially. The share will go up. And we do believe that if it is going to be the third largest market, that's why we are doubling down. I mean if it is going to be, in my view, 10 years, second largest market, we would like to really double down and play a very dominant role in this market.

This is Vimal Gohil from Alchemy Capital. Sir, my question is around -- you mentioned reusable assets and solutions in the presentation. I just wanted to ask how are we -- how are these solutions competing with the Chinese counterparts? Because, one, globally, we've seen a massive flip flop. So EVs took a backseat last year. Now suddenly, you're seeing the near-term data on EVs growing 50% in some markets because of what we are seeing on the oil price. So there could be another flip on that. And the OEMs will have to be very, very agile. There are certain quick-to-use Chinese products or IPs available, plus there is the Google and the Apple ecosystem also that's available on the front end. So how are our products sort of working over there? That's point number one. And lastly, on this R&D aggressive experimentation strategy that we've sort of capitalized over the last 3, 4, 5 years, that is moving towards more disciplined capital efficiency by these OEMs. So how are we looking to maneuver that aspect? That will be helpful.

I'll give you first answer, you can add if you want to. The second answer I will tell you is we talked about is improving our wallet share and coming out going with the product and solution. So instead of -- see, fundamentally, the shift in the services business is having -- doing a work with somebody else in terms of or then later on in terms of getting work done, then whether we can do it ourselves, whether we can do it in GCS versus having a solution, full-fledged solution and somebody ready to take the ownership and doing it faster and with innovation. So that is the basically fundamental thing. And that's why we mentioned about how we will increase our wallet share, and that is something we measure every time. So, I think that's how we would like to increase that. The second thing is we showed the Mackenzie numbers also. There is a shift in the spend, but actually, the overall spend is increasing. The somewhere else, it will get cut down, but the overall spend will increase. So this is the answer for the second question. About the Chinese OEM, I can tell you that there are -- Chinese has been very successful in China. When you go outside China, their ecosystem does not work. One of the best benefit of Chinese OEM is in China is because of their ecosystem. And one of the reasons they find favor with KPIT is also because of a very strong partner and the trusted partner to the OEMs outside China. So that's why they are ready to partner with us for going outside China. Many of these, we find more traction than others. To answer your question, we believe with AI-based and the solutions, our solutions will be as good, if not better, because many of these solutions are localized also. They need a localized law, localized proven way of working. China is a special market. It works in a different way. So having that understanding of different market, working in that market will give us a unique place.

Sir, just one clarification or one question here, a fresh question is some of these Chinese specialists, automotive ER&D specialists are working -- are working with very high gross margins. That is their revenue per employee is significantly higher, but their investments into R&D are far, far above the industry average, and they're working on negative EBITDA margins. In that context, and plus we are sort of -- and they are going global as well. They are working with some of these larger OEMs. We are sort of -- we will be encountering them when we sit across the table for most of these OEMs that we work with. And to that extent, we are talking of expansion of EBITDA margins from the current 20-odd levels 22 to 24. If you can just maybe reconcile the math here that we are competing with them, plus we are talking about expanding EBITDA margins.

So I mean -- I don't know whether you have a specific example, but we know all the Chinese players. We -- I mean, there's some places we have come across some of these, but we can compete with them favorably outside China. In China, we are building our capacity to -- basically, we talked about in certain products and solutions like -- I mean, just to give you the validation of the products which we have, we are selling it to all the top OEMs in China. We are also -- if you look at some solutions like we are selling -- there is a very good interest in China to do that. So, I don't see any. I'm sure there will be good tech some places. I'm not saying everywhere we will be there.

Let me add to what Kishor is saying. If you look at China, number one, it's their EV platform or their batteries. That's their biggest export as of now. The second part, their hope is they will also sell the software platform, right, on top of that. So, to us, the EV platform and the batteries complement. This is where we can play the integration, validation, production because they don't have that experience. They don't have the local capability. So for some of our OEMs, we are already working with Chinese Tier 1s or Tier 2s for that matter to help them go into production, right? So that is very complementary to what we are doing. As far as the software stack is concerned, that's where the exposure could be. Yes, potential threat, but I think we are going to take them head on. And that's why Anup presented the recycle and the solutions that we are building. We think that they are a lot more robust, and they are actually localized in different markets where Chinese have not -- don't have the same kind of experience. So yes, they are going to be complementary in some areas. There will be some competition. But I think we are on.

Sir, one percentage of revenues coming from China, that will help. You've given the number in India, that is 4%.

We would not like to talk about that, but it is similar to India.

Just want a sense of -- when I just see the automotive landscape, at least also in India, is that somehow over the last few years, the Japanese seem to have lost their way, right? I mean there used to be a lot of new products. The Japanese OEMs were looked at very favorably in a country like India for reliability of their cars, fuel efficiency, et cetera. Last few years, they seem to have lost their mojo. It so happens that also your ramp down seems to be from a Japanese OEM, right? And I think when there was an early wave of electrification and EV, I think they were still backing and rooting for hybrids. Maybe hybrids will also -- all 3 will coexist. But even -- what are you seeing? What are these Japanese OEMs thinking? Because they are very large players globally, right? And not just in India, but I somehow feel that they seem to be losing their way even globally. What is the thinking? Do you think that usually they take time to decide and then move and hopefully Will this help us get more business from the Japanese OEMs?

Let's talk about 3 specific ones, correct? The biggest one, if you look at them, they have done very well as compared to anybody else. The big Japanese OEM, right? Toyota. They're still the biggest -- the drop in their profitability was comparatively lower. Sales actually went up compared to everybody else, right? So they are fairly resilient because they are global foot print and have localized their products everywhere. They do have a lead, and if you look at the SUV journey, they are somewhat behind. That gives them a runway before they start losing market share in the larger global market -- not specifically India, but globally. There is an opportunity for us to help someone like Toyota rapidly move into the SUV segment and expand across multiple product categories. They are still number one in hybrids; they were the first movers and continue to dominate. In some markets, especially the US --their most profitable market -- it still makes perfect sense. They have taken longer to commit fully, choosing to double down on hybrids instead of BEVs. However, in China, Toyota has launched a battery electric vehicle with a Level 2+ autonomy stack, and they are gaining market share there. They are taking steps forward, although it has been a difficult period. They are cutting costs significantly and reassessing which markets matter most and where they can remain relevant. For Honda, the US remains the key market where they perform well and maintain strong brand trust. However, all three—Toyota, Honda, and Nissan -- have significantly lost market share in China in recent years. That is where they have fallen behind. As Chinese EV players expand into Southeast Asia and Latin America, competition is increasing in battery electric vehicles. However, these regions still have only about 10–15% EV penetration. The remaining 80–85%, it's still Toyota largely and maybe a bit of Honda and Nissan in those. So to your point, yes, there is a challenge. All 3 of them are dealing with it a little differently. But I think in the recent past, there has been a bigger wake-up call, and you have started to see actions from Nissan in the last 1 year, and you'll see similar actions from Honda in the next month or 2. Right? To really find out which markets are going to define them in the future and what's going to be their differentiator. They're betting big. They've been betting big on hydrogen, on sodium cells as well. So I think they're trying to now disrupt the China. They've probably given up on the pure battery electric part, right? They are saying now how to disrupt China beyond battery electric. That's the thinking. So we'll see how this unfolds. But I think you're spot on. Nissan has been in trouble. Now Honda is getting in trouble. And if Toyota doesn't change, they can potentially get in trouble in a couple of years.

Our next question is by Mr. Arun. I'd like to request Arun to kindly introduce himself. Along with his organization's name. Could you please start by introducing yourself organization's name and then your question.

My name is Arun and I'm a qualified chartered accountant. I'm from Seeking Alpha. Just having one question. You mentioned about the middleware and the Forex part, right? When do we expect these things to get normalized and we can expect some incremental contribution from the Forex?

I think I mentioned a bit that when the new architecture programs will start coming in, I think that's when that will come. But in off-highway commercial, there is already an opportunity for us to introduce. I think -- so there are -- both on pass car as well as off-highway commercial, it will take some time because typically, with multiple changes, there is a 1 to 2 year delay in these programs. So that's when it would come up. Anup, you have anything.

And just one clarification. Not all middleware from KPIT perspective equals to CoreX. CoreX is a platform. So CoreX platform, wherever it goes, KPIT will go in terms of its implementation partner. However, the middleware demand will, to Kishor's point, will sort of start to pick up for us in trucks and off-highway as we do more and more of their software-defined machine programs.

Understood. And one more thing. The TCV wins in this quarter, there is a significant jump. And coincidentally, it is at the same time when we are seeing these 2 big SUVs are coming to an end. Just trying to understand like how we manage a significant jump in the TCV in this particular quarter and not in the earlier quarters. And secondly, how do you think like what can be the new base for the TCV wins for us maybe in the upcoming quarters?

First thing is we are happy that -- I hope you are also happy that it has come. It has come on the back of, I said, off-highway commercial and a few other strong wins we had and also other -- our traditional clients also. So it's not -- it's a process. I think it just worked out during this quarter. I can't say specifically what it is. But typically, I think I would say that I mean, I cannot say what is the minimum we will earn every quarter in terms of wins. But I think looking at the market, I think we see that much stronger wins as compared to the last year, every quarter.

I think quarter-on-quarter, there will be variability because they are very different. But if you take the 6-monthly yearly view, you'll see change year-on-year quite a bit in a positive direction.

And please understand some of these are multiyear. So that's why what Sachin mentioned, if you win one large -- it may not happen every quarter, but typically, we see a stronger traction as compared to that.

This is Moez Chandani from Ambit. So my first question was, in your conversations with European and North American OEMs, how are they responding to all the challenges that they are facing. They saw EVs decline significantly to write-off. Now they are facing competition with China. Is the focus right now very firmly on cost consolidation where they just want to preserve their market share? Or do you see any change in terms of appetite for them to maybe even increase or improve their LTV spend? That's the first question.

Sure. So both 2 separate markets, different strategies, right? If you look at -- and I'm generalizing, first, let's take Europe because that's where the pressure is the highest. There are tariffs and then there is more intense Chinese competition, not only in Europe, but also in China for the European OEMs, right? So they are under a lot more pressure than the American ones at this point in time. So their strategy is essentially they have to dramatically reduce their costs. So 2 things: a, cost of the product and cost of production. That's really their focus. If you look at it, there are still -- when we look at them, there are still a lot of inefficiencies. They've been working with -- their ecosystem is also -- it's very localized to Germany and Western Europe, sometimes in Eastern Europe. So they are taking a very hard look. What was working in their favor is going against them now, right? This is what helped them build true engineering excellence, right, under the kind of vehicles that they have built. But now that is getting disrupted because of the Chinese OEMs. So a, they have to let go of that. And then they have to look at new set of partners. Some will come from China, some will come from India. And that's exactly what they are going through. The net-net of that is, a, there is a lot of cost that they can save, both on the product side as well as in the production side by just relooking at how they do this work, right, and with whom they do this work, right? So there is tremendous headroom for them to reduce the cost there. So that's what we are seeing in Europe at this point in time with all the 3 OEMs. Now one of them specifically is already thinking about the future, right? And the other 2 will start to think in pockets, they are already thinking about it, but they'll think about it maybe once they get their costs a little bit a lot more aligned to the future business, right? So that's some color to what we are seeing at, and I'm generalizing this for all of Europe. When I say this, it's mostly about Germany. Of course, there are other nuances in U.K. and France. In North America, there are 2 now, right, besides Tesla. And for them, they are in a protected market. If you see 80% of their sales, Chandani, if I'm not mistaken, both for GM and Ford are actually in North America. And that's why they don't have Chinese competition, right? And their hope is that they will not have Chinese competition in the immediate future. So their view is very different. They are actually investing in the future. And when it comes to General Motors, they're actually working on the second generation of SUV as we speak, correct? The other one has scrapped their next generation, but they are working on an intermediate kind of -- so I think the approaches are very different. They are remaining focused on the vehicles that we make money for them in the U.S., which are largely the SUVs, and they're doubling down on that, right? If you look at it, there is very little demand for electric vehicles in the U.S., especially now that the benefits have gone away, right? The government support has gone away. So, they are scrapping their electric programs and doubling down on ICE as well as hybrid, right? One of them has created a separate company in California that they think can compete with the Chinese, right? So what does that mean, right? In Europe, it creates a tremendous opportunity for us to be part of their new ecosystem in a more strategic manner. And in the U.S., we are already part of their future programs that are necessary for them to remain relevant and competitive in the U.S. Now in the U.S., for these 2 OEMs, even though they don't have competition from China, but guess who they have competition from. It's the other OEMs from Japan, Korea and Europe, correct? Because for them, China is not their #1 market anymore. It's the U.S., right? So, they still have to remain competitive in their own way, and that creates an opportunity for G2A.

Got it. Secondly, if I'm just looking at the off-highway segment, right, and that's something that you've talked about will be a big growth driver. Now I understand the size of the automotive software market for pass car, but how big do you think is the market for off-highway? Is adoption or requirement for software really as high to compensate for any decline that you're seeing in the pass car segment?

So number one, just to get this out of the way, there is no decline that we are seeing in pass car segments. if you remember our second slide, we do believe that the spend will go up. There is a reset of that spend, but the spend will go up in pass cars. So we are not giving up on passenger cars. It's our bread and butter, will continue to remain our bread and butter going forward. However, as the size of our company grows, we need to also expand our horizon in a very strategic manner. That's exactly what we are doing by looking at trucks and off-highway. The spend is very different. A, the number of OEMs that exist in trucks outside of China are very limited. There are 5 that dominate probably 80% of the market share globally, right, outside of China. So the spend is limited to them. Off-highway is a different thing, right? I think there are specialists in different thing. There are 5 big ones globally. But then there are a lot of local ones in Europe, in India, Southeast Asia and so forth, right, and in the U.S. as well. Their spend is not quite as much as passenger car. I mean number of vehicles sold, right? You are talking about 90 million versus less than 1 million, right? So it's not the same. However, their applications are very different. And they are 15 years behind when it comes to making investments in software. So that creates headroom for us to grow for the next several years along with that. If that answers your question.

And just lastly, trying to understand these ramp downs that you're talking about a little bit better. Was it that this was a planned ramp down where a project basically naturally ended its life cycle? Or was there a change in strategy that caused this decline? And do you also see some of the other large projects also ramping down, say at the end of FY '27 or in FY '28?

Very good question. And I'm glad you asked that question because it's one was the plan. And we are very proud to say that there will be an SDV hitting the ground running in a more efficient manner in the next 3 to 6 months. So that's the program that will get over. We are already signing the procedure life programs with them. The quantum will not be same as the large onetime SDV program that we did. But it's the future work that we'll continue to do with this OEM. The other one was a surprise. not only to us but to the rest of the world when that OEM decided to stop their EV programs, the launch of this, and they decided to take a $15 billion hit, onetime hit, right, on their balance sheet. So that was a surprise and a very unpleasant one for us, but that's life. The other question is, in the foreseeable future, we don't see any other programs coming to an upwards trend, right? I'm just quickly scanning all our OEM engagement as you asked that question, not likely at this point in time. We don't see it definitely to the tune of what we saw with this particular OEM, right? So that's really the second part. We don't, but the reason we talked about building resilience growth is we have to be ready for these kinds of surprises. Some are pleasant, some are not surprising. So irrespective of that, we need to learn to grow.

Abhishek Gupta from Axis Mutual Fund. Sir, just to start with on this quarter, there was a decline in the strategic clients, revenue from the strategic clients. So there's SDV programs, which has got stopped in the like will stop in the next 2 quarters. Does it have an incremental impact on the, like was they our strategic clients, first of all, and that had the incremental impact in this quarter in that account? First on that. And secondly, on the Japan market, sir, so basically, Honda is declining for us, right? And despite of that, we are seeing growth in the Japan market. So -- and incrementally, we are saying the SDV program from them is stopping and that might impact our incoming quarters. But the growth which we saw in Japan market in this quarter, is it more of a onetime thing or it's going to be like incremental opportunity is there over there, but it won't be able to backfill the Honda yet? Just 2 on this quarter.

The first question is the planned ramp-down of one OEM that has been happening as it gets to the production. So some of the strategic business that has gone down with one planned OEM, it actually started to impact us not only in Q4, but in Q3 as well, right? So a little bit happened in Q3, a little bit happened in Q4, will feel more impact in Q1 now of that which has been planned, right? No surprises to us in that. The second one was a surprise, which it was a program, unfortunately, very close to the production, right, unfortunately. So there was a little bit of a reduction in Q4, but the dramatic reduction actually happens in Q1, right? As far as the Japan is concerned, yes, we've had tremendous growth. What we are going to do in future is not have one pony story in Japan, right? You saw a partnership with the Tier 1 now in Japan. There are 3 truck and off-highway OEMs that we are targeting and the remaining 2 pass car OEMs that we talked about earlier on, especially the big one. right? So hopefully, it will take time. But the thing is in the midterm, we'll have a lot more broader base growth coming out of Japan. Growth is Asia, also India. It's not only Japan.

Got it, sir. And secondly, sir, in your second slide on the passenger vehicle spends, like from '26 to FY '30, we saw increases happening over there. But sir, if I look at the European OEMs and their recent commentary as well as presentation, everybody till FY '29 seems to be cutting down their budgets. And if I compare on the Japanese market, we are still very young over there, and we are just still growing. So, the spend increase which we are seeing over there, is it more traction from the Indian market that is what's getting reflected over there? And why is that spend increasing if the biggest market of our Europe, all the OEMs are starting to cut down on the R&D spends and they have been very blunt about that in the market.

So the overall, people are cutting costs, right, especially in Europe. And there are it's not necessarily R&D spend. The cost is going down so that they can continue to spend money where it matters to them from a future perspective. And fortunately, for us, it is also software. Now within that, there are inefficiencies in which they spend money, right? Working with the local ecosystem where the costs are very high and the lock-in is a lot longer, right? KPIT can provide flexibility, especially given our products and solutions, we can do all of this a lot more efficiently for them, right? So that's really our opportunity. So overall, I think in markets like India, the West Coast of the U.S., China, in parts of Korea and Japan, the spend will continue to go up. And that's the reflection that you see, It's also true in North America, for that matter, right? All the OEMs, I talked about the West Coast, but I'm also talking about Detroit, right? The spending will go up. There is a reset that everybody is trying to do in the last couple of years. I think some of it is behind them. So now that there is a clear road map. If you look at the reports from McKinsey earlier on, the spend percentage went up even more significantly. So it's already come down to some extent, and this is the latest one that we have. And we have our own ways of validating this by having real conversations with the clients. So, we believe that this is roughly what it is going to be. We just have to figure out how much of that we can capture going forward.

Got it. And sir, lastly, from my side, beyond FY '27, we seem to be very confident in our solutions and product side of the business, like it will be 50% and more. So the new products that we are taking to our clients, it will be like more of a replacement product, like which will be our competitor over there? Or it will be a fully net new or more, what is it, the clients which we have, that don't have that tech adoption yet in their system, and this will make them more efficient, more operationally effective. Like, what is the target client.

Yes. So it's a mix. No black and white answer on this. It's a mix of it. But even for the replacement category, there are obviously new things that we are bringing to the table. And that is why the replacement is important. The end-to-end part of it is there. There is AI introduced into that. And there are a few things that are really the new problems that we are addressing, and we've been working on this for quite some time. So these are not really new. I mean, the early market tests have been done.

Another way to answer that question is if you look at products, our products, they're actually replacing something that has been provided by somebody else, right? So it's completely a replacement. When it comes to our solution, it's a little more disruptive. It's not replacing like-to-like, but it's replacing an ecosystem to some extent of the OEM, right? So there is a -- not subtle, obvious difference between the 2.

Kishor, this is Soumitra from Avendus. Just continuing the question that Abhishek just asked, roughly, we are around $727 million, $730 million in revenues. In 3 years' time, even if we were to reach roughly $950 million to $1 billion in revenues, we are targeting around $550 million to $600 million from the solutions and products. And we are currently at about 110-odd million. Roughly, we will grow 30% this year. But for the next 2 years or next 3 years, in that case, the number will have to grow by 3 to 4x. Is the understanding correct? I just wanted to understand the back-of-the-envelope calculation.

Absolutely. I think there are 2 things to it. One is most of the current business, as we said, fixed price was the first step, but then that will get converted into an AI-infused solution. So that is the first step. So many of these will get converted into AI-infused solutions, which will give us better productivity and margins and more ownership, and that's why the scale will grow. That's the first part. And the second is the product. So I think from that perspective, that number would be fine. I think we believe that's a nonlinear growth. We just want to -- 100%, we cannot say, but we believe that's a very reasonable number.

Okay. And the second question is on this market share thing. When you look at yourself with your competitors in any deal, especially given the fact that Infosys acquired Intech, SPL acquired ASAP, when you do a volume-based market share calculation, in the last 12 to 18 months of all the deals that have happened in the market, has there been any market share loss? I mean, you would have ended up winning 6 deals in a normal scenario. Has the competition increased, which resulted in 6 maybe coming down to 5 or so?

You can look at the revenues of the acquired entities, which you talked about, and what has happened to their revenues, actually. So to answer very quickly, we have not seen any loss to this. Actually, in Europe, specifically, we are looking -- our biggest opportunity is consolidation, which is happening, and KPIT is certainly a major beneficiary.

Kawaljeet from Kotak Institutional Equities. Can you hear me?

Can you speak up a little bit, please?

It's Kawaljeet from Kotak Institutional Equities. My question is that in Europe, there are plenty of assets available for sale, [indiscernible], DAG, maybe there are a lot of players attached to the carrier ecosystem. Do any of those assets interest you? And second is that in mechanical engineering, are there any parts of the mechanical engineering ecosystem that should be of interest to KPIT? Or would the focus continue to be on embedded and software?

So, coming to your first question, I think you look at their performance, most of these companies are struggling both in terms of revenue, and this has so many employees in that part of the world with less than 35 hours a week, that kind of cost is a liability in some sense. And even the companies that own it. Most of these companies you are talking about, some of the OEMs have a stake in these companies. But they prefer to move away because from their perspective, the value is actually reducing their cost, bringing innovation, bringing the best practices from other organizations. So they are moving. So shortly, we are seeing all these assets. And I think, as Anup said, some of the disruptions that are coming and the kind of products and solutions we are bringing are far superior to what these companies have. So that is the first question. And of course, they are not cost-competitive, which is the biggest concern for the OEMs. So that is the first. On the mechanical side, I think the Caresoft acquisition, which we did, I think there are 2 things. First is it's very important in off-highway commercial because their overall mechanical content is high. So in some of these areas, it's important. In the pass car, cost reduction is a very important part. So, we are focusing on the cost reduction part, wherever we can bring the cost reduction. And the third part, which we are focusing is the manufacturing part, manufacturing efficiency, because that's where we are trying to reduce the cost of manufacturing, as Sachin mentioned earlier, like Europe or other parts. So, we have got some of these capabilities ourselves as well as through the acquisition of Caresoft. So that's what we're having.

Just a follow-up question. If you look at the German car manufacturers, they have, especially the one with a full name that starts with, they have farmed out multiple contracts away from the likes of EDAG and et cetera, to offshore players, but there have been massive delays, and in some cases, not even ramp-up. What explains the reluctance for actually those ramp-up in contracts, which have been delayed for a very long time?

I did not get that.

That is the time to consolidate the business in India. And what his question is you think that the ramp-up is not happening.

Okay. Okay. I think if you -- I mean, I cannot go into details about every OEM. But in this case, if you can check their biggest success or the largest part of their success, whatever they have got with KPIT. So, they're seeing the success. They have seen the success.

This is Rahul from Dolat Capital. So, Sachin, you talked about that wallet share expansion thought process from 10% plus now to eventually going to 20%. So, is this going to come because of our cost effectiveness, solutioning, or some of that AI harness thing that you talked about in that Anup chart? So what are the key drivers for that?

All of the above. In all honesty, it's all of the above. Essentially, we just have to help them. So what we are trying to do is we have to help them create efficiencies within their own system, correct? I think that's the part. And that's why our solutions are going to be helpful. Use of AI in the programs that we deliver is going to be very useful. And that's what is creating a differentiator. So when we are working on any kind of engagements in a competitive scenario, we end up winning not because we offer the lowest cost, but we offer the highest reliability and the greatest return on their investment, right? So that has been sort of the differentiator for us. And we believe that all 3 things that you mentioned are going to help us to go from -- let me correct myself, the 10% wallet share, it will increase by 20% in the immediate future, right? It will not go from 10% to 20% of their wallet share. It will increase by 20% this year. That's really the goal that we are taking in every sense. And we believe that this is how we are going to do it. AI is going to be a big part of that. Our products are going to be a good part of that. That's all that I can say.

Yes. Just one last one for Kishor. You talked about that 30% kind of growth is a possibility on the product solutions side, which.

Sorry.

Yes. And the other math of it is like some part of our existing services pool would kind of be converted into the product solution bucket. So in that process, do we see some kind of shrinkage that might happen to our existing scope of work or will it not harm that in the short-term?

No, it won't harm in that way. In 1 or 2 cases, it can happen with smaller projects. But largely, the idea is to take a larger responsibility and take ownership. So, there will be an efficiency, but you are doing more work. So that's how it will work.

[Operator Instructions].

Just want to understand the Cymotive acquisition and also some of the work that it does. So if I look at the historical revenues, there was a sharp decline for the company in the last 2 years. So what drove that? And also, can I get a sense of other than Volkswagen does the only company work with some other clients as well? And what's the strategy for the company?

So, before you answer the question, can we just request him to also introduce himself? Could you please also tell your name and company.

This is Moez from Ambit.

If you look at almost all the acquisitions that we have done or all the partnerships that we have done, we are taking a look at an expertise that is probably constrained by something, but we know that it is a great expertise. And then we basically try to look at how to take that expertise to the rest of the customers that we have. In Cymotive, if you look at it from a cybersecurity perspective, there are like loads of offerings. I mean, we didn't talk about most of them. But if you look at the in-vehicle and outside the vehicle, there is a good portfolio of work that is way ahead of everything else that has been done. And then you look at the competency of the people there, what they are capable of doing, especially in the context of what is going to happen in the future. AI is going to create more cybersecurity challenges. Quantum has been advanced. So, 2035 has come down to 2029. So, if you look at these 2 potential threats that will happen in the future, the competency of the people and the solutions that they have are extremely relevant. And now we basically would like to take them to other customers.

I think on the CARIAD side, I think it is the same cost issue. The strategy is to move to India, most of the world. They're already into multimillion vehicles. And they find it a great win-win because KPIT is their trusted partner, as you can see the quote from CARIAD. And then the consolidation, and that is how the revenue came down because of that, and also of the cycle of the CARIAD during that time, because CARIAD's overall business was also impacted during that time. But I think there is a bigger opportunity there. But more importantly, as Anup said, I think we can take it to others. The biggest advantage to that is it is in many millions of vehicles already, which gives us the confidence or other OEMs.

Thank you so much for all the answers. And with this, we would like to conclude today's session. Thank you so much for being with us.