KPIT offers exposure to a highly attractive, rapidly expanding market (Automotive Electronics, Manufacturing and Energy & Utility), alongside an ability to capitalise as a low‐cost disruptor with compelling technology like ‘Revolo’. KPIT has one of the strongest industry positioning profiles in the Automotive Segments. Retain buy.

1. KPIT Technologies
Autonomous roadmap for growth, Retain “BUY”
September 18, 2014
200
150
100
50
0
Sep‐13
Nov‐13
Jan‐14
Prabhudas Lilladher Pvt. Ltd. and/or its associates (the 'Firm') does and/or seeks to do business with companies covered in its research reports. As a result investors should be aware that
the Firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision.
Please refer to important disclosures and disclaimers at the end of the report
Company Update
Shashi Bhusan
shashibhusan@plindia.com
+91‐22‐66322300
Hussain Kagzi
hussainkagzi@plindia.com
+91‐22‐66322242
Rating BUY
Price Rs158
Target Price Rs200
Implied Upside 26.6%
Sensex 26,631
Nifty 7,976
(Prices as on September 17, 2014)
Trading data
Market Cap. (Rs bn) 12.4
Shares o/s (m) 78.5
3M Avg. Daily value (Rs m) 225.4
Major shareholders
Promoters 22.28%
Foreign 33.01%
Domestic Inst. 6.86%
Public & Other 37.85%
Stock Performance
(%) 1M 6M 12M
Absolute 3.7 0.6 14.4
Relative 1.7 (21.5) (20.0)
How we differ from Consensus
EPS (Rs) PL Cons. % Diff.
2015 14.1 14.0 0.6
2016 17.9 16.7 7.1
Price Performance (RIC: KPIT.BO, BB: KPIT IN)
Source: Bloomberg
Mar‐14
May‐14
Jul‐14
Sep‐14
(Rs)
We evaluated KPIT’s service offerings and strength to dig deeper into our hypothesis.
KPIT offers exposure to a highly attractive, rapidly expanding market (Automotive
Electronics, Manufacturing and Energy & Utility), alongside an ability to capitalise as
a low‐cost disruptor with compelling technology like ‘Revolo’. KPIT has one of the
strongest industry positioning profiles in the Automotive Segments. Retain “BUY”.
 Core drivers of growth – Strength in Automotive sector to drive surprises: We
expect strong end‐market growth of AUTOSAR, Infotainment, Vision Systems
and Powertrain driven by new car ratings regimes. We believe KPIT’s
technological superiority will retain its dominant share in the automotive
vertical. We expect the mix to shift towards higher‐end functionality, leading to
higher realization driving mid‐20s revenue growth in the segment.
 Return in discretionary and renewed strategy to drive SAP and IES momentum:
SAP and IES (Oracle) SBU struggle are likely to grow over the last six quarters
due to technology reset, weaker maintenance revenue, cost overrun and slow
decision making. We see the concerns waning in FY15 as the management sees
improved deal pipeline, deal closures and deal ramp‐ups.
 Account mining – Increasing focus on top 50 acccounts: Management has
increased their focus on mining top‐50 clients. KPIT has hired ~35 account
managers to mine top‐50 accounts and is in the processs of ramping it up. We
expect this focus on account mining and restructuring of account management
by verticals to drive stronger revenue growth.
 Risks to the investment case: Risks to our view include (1) Weakening
discretionary spend (2) In‐house R&D for Automotive (3) Investment needs (4)
Worsening DSOs and (5) Risk associated with inorganic ventures.
 Valuation and Recommendation – BUY with TP of Rs200: We forecast top‐line
growth of 14% in FY14‐16, while KPIT’s asset‐light model should allow EBITDA
margin expansion over FY14‐16 from 12.1% to 15.6% and a net income CAGR of
16%. We maintain “BUY” with 27% upside from the current market price.
Key financials (Y/e March) 2013 2014 2015E 2016E
Revenues (Rs m) 22,386 26,940 29,606 33,547
Growth (%) 49.2 20.3 9.9 13.3
EBITDA (Rs m) 3,655 4,233 4,137 5,220
PAT (Rs m) 1,991 2,490 2,620 3,312
EPS (Rs) 10.3 13.4 14.1 17.9
Growth (%) 26.4 30.0 5.2 26.4
Net DPS (Rs) 0.8 1.9 2.2 2.5
Profitability & Valuation 2013 2014 2015E 2016E
EBITDA margin (%) 16.3 15.7 14.0 15.6
RoE (%) 22.8 21.5 18.9 20.2
RoCE (%) 20.9 20.2 17.8 18.9
EV / sales (x) 1.3 1.1 1.0 0.8
EV / EBITDA (x) 8.3 6.8 7.0 5.2
PE (x) 15.3 11.8 11.2 8.9
P / BV (x) 2.9 2.3 2.0 1.6
Net dividend yield (%) 0.5 1.2 1.4 1.6
Source: Company Data; PL Research

2. KPIT Technologies
Exhibit 1: Services and Vertical Metrics of KPIT
Source: Company Data, PL Research
Exhibit 2: KPIT Competencies – Strength in Auto Vertical
In Auto Vertical In Manufacturing Vertical In Energy & Utility Vertical
Opportunities KPIT Competencies Opportunities KPIT Competencies Opportunities KPIT Competencies
Electrification Powertrain Intelligent Products Enterprise IT Sustainable Energy ERP
Connected Cars Infotainment M2M Communication Consulting Smart Grids Enterprise Asset Mgmt
Infotainment Safety, Chassis Concurrent Engineering BI & Analytics Smart Meters Cloud
Safety In‐vehicle Networking Engineering Analytics Cloud Enterprise Asset Mgmt Mobility Solutions
Electronics Consolidation Teleatics Big Data eBiz Mobility Solutions On‐Demand Analytics
Social Media Diagnostics Mobility Solutions Business Process Soln On‐Demand Analytics Customer Billing & Info
Analytics Body Electronics 3D Printing Product Design Customer Billing & Info Productized Solution
Shortening Product Cycle ERP Competence Tracking Infrastructure Upgradation In Memory Computing
Newer Ownership Models Consulting After Market
Multi‐Modal Mobility After Market Embedded Electronics
Source: Company Data, PL Research
Exhibit 3: KPIT product portfolio – Strong presence in Automotive Ecosystem
Source: Company Data, PL Research
September 18, 2014 2

3. KPIT Technologies
A&E – Powering the automotive vertical
We look at the Automotive SBU of KPIT that distinguishes it from other IT
companies. Tightening in emission standards, along with drive towards fuel
efficiency and a shift in consumer preference have brought focus on Powertrain
engineering to design engines abiding these innovations.
Considering the fast development of auto electronics and intelligence, automotive
electronics has become the fastest growing segment of auto parts with an increasing
demand on safety and security, telecommunications, environmental protection and
energy‐saving. More and more OEMs have begun to adopt electronic systems and
have integrated semiconductor circuits in vehicles. Automotive electronics has
become a major differentiated indicator for vehicles. A major feature of the
development of automotive safety is active safety, while active safety technology
development is mainly represented by electronics control with reliability as a top
priority. Mobile Internet technology has further promoted the development of
automotive intelligent interconnected applications, which can be combined with
vehicle safety through a combination of big data to improve reliability. As connected
vehicles involve different aspects of the industry chain, various parties are seeking
more benefits. Realising how to make a trade‐off regarding the interests of all
parties is an important prerequisite to promoting the development of Connected
Vehicles. No matter in which sub‐segment, improving products and the cost
performance of the technology from the perspective of consumers is imperative for
making a quick win in the market.
Most automotive electronics enterprises do not have the core technology and are
hampered by a limited R&D scale. Automotive electronics enterprises will continue
to focus on independent R&D and M&A for future development.
Exhibit 4: Demand of automotive electronics is going to surge
Automotive Electronics revenue ($ bn)
190 205
314
330
310
290
270
250
230
210
190
170
150
2013 2014 2020
Source: Industry Expert, PL Research
September 18, 2014 3

4. KPIT Technologies
Newly developed and improved automotive electronics applications represent an
important pillar in the value creation of the next generation of automobiles. Market
researchers and Industry Experts estimate the total global market volume for
automotive electronics as being more than US$190bn in 2013, a figure that is set to
rise to US$205bn in 2014. The market is expected to continue growing, leaping to a
level of US$314bn by the year 2020; this is equivalent to a CAGR of 7.3% for the
period 2012 to 2020.
Exhibit 5: An example of sensors needed in the cars
Source: Cisco, PL Research
Exhibit 6: Global Automotive Sensors Market
16.2
Automotive Sensor ($ bn)
17.4
18.8
30.3
32
29
26
23
20
17
14
2012 2013 2014 2020
Source: Industry Experts, PL Research
September 18, 2014 4

5. KPIT Technologies
Overall, the major driving forces for increased demand for automotive sensors in
vehicles include regulatory mandates for improving fuel economy and stringent
emission standards as well as requirements for advanced safety systems. The growth
is also attributed by consumer demand for safety & security, comfort & convenience
features and the growth of hybrid and electric vehicles which is creating enormous
opportunities for new types of sensors in automobile industry. Automotive Sensors
market worldwide, standing at US$16.2bn in 2012, estimated to be US$17.4bn in
2013 and forecast at US$18.8bn in 2014, is further projected to reach US$30.3bn by
2020, thereby, posting a CAGR Of 8.2% between 2012 and 2020. Estimated to be
US$2.6bn in 2013, demand for Automotive MEMS Sensors globally is projected to
reach US$4.7bn by 2020.
KPIT has established practices in the embedded space like Powertrain, Hybrid
Solutions, Infotainment, Autosar, Body Electronics, Chassis, Safety, Diagnostics,
Telematics, specialized Mechanical Design, coupled with initiatives like Diagnostics
on the cloud, Intelligent Transportation Systems, Big Data Analytics, Infotainment
Platform (KIVI) , Warranty Management Solutions and patented software products
position us extremely well for sustained growth in the automotive vertical.
A&E SBU, which contributes 25% of total company revenue, was the second highest
growing SBU during the year with 23% YoY growth. Despite increased investments
on people and technology, EBITDA margin for this SBU was stable at 22‐23%.
Exhibit 7: A&E SBU ‐ Consistent growth CQGR of 4.2% since Q1FY12
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
‐2.0%
‐4.0%
‐6.0%
35
30
25
20
15
10
Auto & Engineering (US$ m) QoQ Gr. (RHS)
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Source: Company Data, PL Research
We expect A&E SBU to grow in high‐teens in FY15‐17E, with EBITDA margin seeing
improvement from currently ~23% to ~25% over FY15‐16E.
September 18, 2014 5

6. KPIT Technologies
IES SBU and SAP SBU – Driven by return in discretionary spend
SAP SBU – Success from SuccessFactor
According to the management, KPIT, in H2FY13, struggled to keep‐up the pace with
changed strategy of SAP, as SAP acquired SuccessFactors (SFSF) (a cloud based HRM
product company). After the acquisition, the demand for on‐premise HRM licenses
declined and SFSF sales ballooned. Hence, KPIT had to train its onsite resources and
get them certified on SFSF which had a dent on growth and utilization, thus,
affecting profitability negatively.
Moreover, with the rapid growth over the years, the SAP deal sizes kept on
increasing and the company was not fully prepared on execution of these large deals
which resulted in some cost overruns in a couple of large projects. The company also
experienced delayed closure of some very large SAP deals by a couple of quarters
which further impacted growth and profitability.
Impact: Revenues declined by 1% on a YoY basis, with the SBU contributing 25% to
total company revenues. Delay in closure of a few of these deals, especially in North
America, was the major factor for the slowdown in the SBU’s performance, thus,
hindering company’s overall growth. They closed more than 17 deals exceeding
US$78.5m in value. Profitability for SAP SBU went down as the full year EBITDA
margin was negative at 5‐6%.
Measures Taken: The management has taken various initiatives for SAP turnaround
 Created SFSF practices in the US and are seeing traction and deal flows
 Rationalized fixed cost (acquired through Sparta)
 Let go low profitability businesses to improve margin
Positive impacts in FY15: According to the management, profitability improvement
in FY15 would be the top priority. SAP SBU has already witnessed turnaround during
Q1FY15 with a low single digit margin. Management is confident of turning around
SAP SBU to high‐single‐digit EBITDA margin by Q4FY15.
September 18, 2014 6

7. KPIT Technologies
Exhibit 8: SAP SBU ‐ Patchy growth CQGR of 2% since Q1FY12
30%
25%
20%
15%
10%
5%
0%
‐5%
‐10%
33
30
27
24
21
18
SAP SBU (US$ m) QoQ Gr. (RHS)
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Source: Company Data, PL Research
Integrated Enterprise Solution SBU – Deal pipeline healthy
KPIT continues to see good traction for JDE offerings, Oracle E‐Business suite, Oracle
Fusion Middleware and (IMS) as they won new deals in these respective areas.
Management sees strong deal pipeline in IES as clients look for discretionary spend
with green‐field implementations and instance consolidation. The company has
improved EBITDA margin to the range of 18‐19% and likely to sustain it.
Exhibit 9: IES SBU – Better than SAP but weaker than A&E CQGR of 3.9% since Q1FY12
14%
8%
2%
‐4%
‐10%
‐16%
‐22%
50
45
40
35
30
25
IES SBU (US$ m) QoQ Gr. (RHS)
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Source: Company Data, PL Research
September 18, 2014 7

8. KPIT Technologies
Eyeing US$1bn revenue and 20% EBITDA margin by 2017
FY14 – Year of Restructuring and Consolidation
FY14 was the year of consolidation as KPIT’s management spent time reorganizing
themselves for the next phase of high growth at an increased base. The company
missed the guidance due to reduction in SAP revenues (which contributes 25% of the
top‐line, declined by 11%) due to delayed closure of deals and cross‐currency
fluctuations during the year. The miss was also courtesy flat growth realized by
largest customer. For FY14, excluding SAP, revenue grew by 17% YoY.
KPIT has taken various initiatives to capture next phase of high growth.
 Greater focus on R&D space for IP creation, solution development and filing of
patents.
 Created a separate unit called “Products & Platforms” with increased focus on
non‐linear growth and IP‐based revenues, which will work towards
development of a strong product portfolio
 Witnessing higher traction in (IMS) and would be creating a separate SBU to
capture these significant opportunities.
 KPIT has made few key Executive Appointments
 Mr. Frederic Ramioulle has joined as President – Automotive & Transportation
Industry Business Unit (IBU)
 Mr. Dietmar Imminger has joined as Head of Automotive and Transportation
business in Germany
 Mr. Baljeet Chhazal has joined as Senior VP and Global head of Oracle Business
Unit and he will be based out of US
 Mr. Abhishek Sinha has joined as Senior VP‐ Operational Excellence and his
key responsibility will be to identify and improve areas of operational
excellence across the organization
 Mr. Deepak Purohit has joined as Senior VP‐ Large deals and his immediate
focus market will be US, besides supporting large deal activities in other
geographies
 Mr. Lee Liviu Cocis has joined as VP & Head of IMS practice
 Improving account mining capabilities: KPIT has hired account managers (~30)
to mine their existing clients. Management is targeting their top‐50 accounts,
with one account manager assigned to each account, who has strong industry
understanding, to cross‐sell services like ERP, SCM etc.
Management is confident of achieving FY15 12‐14% revenue growth guidance.
September 18, 2014 8

9. KPIT Technologies
Initiatives for improving cash generation
KPIT has struggled due to poor cash generation over FY11‐14. However,
management effort to improve cash flow has met with some success in Q1FY15. We
expect cash generation to improve in FY15‐16.
According to the management, the reasons for lower cash conversion in FY14
compared to historic performance are:
 CFO considerably lower compared to PAT due to increase in working capital
 Slipped on DSO by 11 days due to increase in credit period by 15 days to largest
customer and higher revenues in the last month of the quarter
 Lower CFO/EBITDA attributed to cost of growth since a fast growth eats up
working capital resulting in lower cash flow conversions
Exhibit 10: Weaker cash generation
190%
130%
70%
10%
‐50%
55%
5%
‐45%
‐95%
‐145%
FCF/EBITDA OCF/PAT (RHS)
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Source: Company Data, PL Research
Exhibit 11: One year forward PER ‐ Trading below long term average
1‐Yr Forward PER Average PER
11.5
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Apr‐04
Sep‐04
Mar‐05
Sep‐05
Feb‐06
Aug‐06
Feb‐07
Jul‐07
Jan‐08
Jul‐08
Dec‐08
Jun‐09
Dec‐09
May‐10
Nov‐10
May‐11
Oct‐11
Apr‐12
Oct‐12
Apr‐13
Sep‐13
Mar‐14
Sep‐14
Source: Company Data, Bloomberg, PL Research
September 18, 2014 9

10. KPIT Technologies
Rated as “Top 10 Breakthrough Sourcing Standouts” by ISG
KPIT, (BSE: 532400; NSE: KPIT), an IT consulting and product engineering partner to
automotive & transportation, manufacturing and energy & utilities corporations,
today announced that it has been listed amongst the Top 10 Outsourcing Service
Providers by Information Services Group (ISG), a leading technology insights, market
intelligence and advisory services company.
KPIT was listed among America's “Top 10 Breakthrough Sourcing Standouts” based
on annual contract value (ACV) won over the last 12 months, according to the ISG
Global Outsourcing Index.
“For more than a decade, the ISG Outsourcing Index has been the authoritative
source for marketplace intelligence related to outsourcing transaction structures and
terms, industry adoption, geographic prevalence and service provider performance,”
said Paul Reynolds, Chief Research Officer of ISG. “KPIT continues to establish itself
as a leading and growing player in the global market, based on its volume of business
in relation to other industry providers.”
Now in its 47th consecutive quarter, the ISG Outsourcing Index provides an
independent review of the latest sourcing industry data and trends for enterprises,
service providers, analysts and the media.
September 18, 2014 10

11. KPIT Technologies
Appendix – A quick look at KPIT’s role in automotive
Since 2010, the global auto market has featured quite a polarized development. The
US has begun to emerge from the economic crisis, while European countries are
facing a debt crisis and excess production capacity. Major emerging markets have
entered a stable stage after one or two years of explosive growth. Hence, the auto
industry is experiencing a global capacity redesign to capture the new growth
markets. At the same time, OEMs are looking for new growth opportunities through
improving car performance, a trend that results from increasingly strict regulatory
requirements as well as technological developments, more specifically a leap in
automotive electronics technology.
Auto development trends such as lightweight materials, miniaturization, intelligence
and electrification, the auto electronics market is experiencing rapid growth. The
improved specialization of parts manufacturers enables them to play a more
important role than OEMs in leading technological innovation in some segments.
Meanwhile, penetration of cross‐industry technology into the automotive industry
has further intensified cross‐sector competition. With the dual impact of industry‐internal
changes and the external economic environment, market concentration has
been further accelerated.
Exhibit 12: Emissions goals include the most stringent regulations in developed markets
Source: ICCT, PL Research
Automotive companies are driving to the fuel efficiency through Hybrids and Electric
Vehicles (EVs) as the solution, but large degree adoption would be High Efficiency
Powertrain (HEP) – Downsized turocharged engines com combined with lighter,
more efficient transmissions and start‐stop batteries.
September 18, 2014 11

12. KPIT Technologies
Exhibit 13: Mandated endeavour to drive fuel efficiency
Source: ICCT, PL Research
The automotive‐related microelectronics market is expected to grow at a far faster
rate than its parent automotive sector. The motor vehicle‐to‐electronics‐to
semiconductor ratio reached a 10:13:15 level in 2013. This dynamic trend is
expected to continue through to the mid‐2020s, a development with significant
impact on the global automotive market.
Exhibit 14: Auto Electronics (CAGR): America (8%), Europe (7%), Japan (3%), APac (10%)
5.3
9.5
2012 2017
13.4
7.8 7.1
6.2
7.2
11.4
16
14
12
10
8
6
4
2
0
America Europe Japan APac
(US$ bn)
Source: ZVEI 2013, PL Research
September 18, 2014 12

13. KPIT Technologies
KPIT role in Powertrain
What is Powertrain? In a motor vehicle, the term powertrain describes the main
components that generate power and deliver it to the road surface, water or air. This
includes the engine, transmission, drive shafts, differentials and the final drive (drive
wheels, continuous track as in military tanks or caterpillar tractors, propeller, etc.).
Sometimes "powertrain" is used to refer to simply the engine and transmission,
including the other components only if they are integral to the transmission. In a
carriage or wagon, running gear designates the wheels and axles in distinction from
the body.
Exhibit 15: Powertrain components
Source: Honda, PL Research
Exhibit 16: ... and its layout
Source: Honda, PL Research
What is the HEP? The HEP (High Efficiency Powertrain) includes a downsized direct
injected turbocharged gasoline (or diesel) engine mated to a highly efficient
transmission with a start‐stop battery system, plus supporting valve, piston, sealing
and exhaust technologies. We believe that HEP adoption will stem from both the
inefficiency of traditional powertrain and greater cost effectiveness than hybrids and
EVs. At its core, the HEP includes a downsized direct injected turbocharged gasoline
engine (or in some cases, especially in Europe, diesel) mated to a highly efficient
transmission with a start‐stop battery system as well as several supporting
electronics, valve, piston, sealing and exhaust technologies.
Powertrain Electronics: Powertrain electronics create a highly developed central
nervous system stretching across a network of three different types of hardware:
sensors (which feed data to the engine control unit), actuators (small electro‐mechanical
motors that control liquid flows) and control units (the “brain” of the
engine). When properly integrated with software, powertrain electronics can, in our
view, capture meaningful efficiency gains across a wide range of operating
conditions that may not be captured in the traditional improvement estimates for
individual mechanical components.
September 18, 2014 13

14. KPIT Technologies
KPIT’s Powertrain team of Automotive SBU has filed a patent application for
Hybrid system architecture for large vehicles. KPIT help OEMs rapidly adopt the
technology for full systems, including sensors and engine control electronics.
KPIT role in Autosar
What is Autosar? AUTOSAR (Automotive Open System Architecture) is an open and
standardized automotive software architecture, jointly developed by automobile
manufacturers, suppliers and tool developers. It is a partnership of automotive
OEMs, suppliers and tool vendors whose objective is to create and establish open
standards for automotive E/E (Electrics/Electronics) architectures that will provide a
basic infrastructure to assist with developing vehicular software, user interfaces and
management for all application domains. This includes the standardization of basic
systems functions, scalability to different vehicle and platform variants,
transferability throughout the network, and integration from multiple suppliers,
maintainability throughout the entire product life‐cycle and software updates and
upgrades over the vehicle's lifetime as some of the key goals.
KPIT AUTOSAR OS is based on OSEK OS with backward compatibility. It is highly
portable and scalable in terms of features for automotive domain. The OS can be
scaled (configured) to run only with the desired features based on the applications
and other constraints.
 Based on AUTOSAR standard
 AUTOSAR OS available for R3.x and R4.x
Exhibit 17: World’s First AUTOSAR R4.0.3 ASIL‐D Software Stack & ECU Configuration Tool
Source: Company Data, PL Research
September 18, 2014 14

15. KPIT Technologies
Exhibit 18: KPIT’s competitors in AUTOSAR Implementation
ArcCore Continental Engineering services dSPACE
ETAS Dassault Systemes Freescale
Mecel Renesas Electronics OpenSynergy
see4sys Vector Informatik GmbH Mentor Graphics
Source: PL Research
Exhibit 19: KPIT’s comprehensive AUTOSAR services
Source: Company Data, PL Research
KPIT in Infotainment
In‐car entertainment (ICE), or in‐vehicle infotainment (IVI), is a collection of
hardware devices installed into automobiles, or other forms of transportation, to
provide audio and/or audio/visual entertainment, as well as automotive navigation
systems (SatNav). This includes playing media such as CDs, DVDs, Freeview/TV, USB
and/or other optional surround sound, or DSP systems. Also, increasingly common in
ICE installs are the incorporation of video game consoles into the vehicle. Systems
can be standalone add‐ons, part of the OEM controls, or a combination of the two.
Exhibit 20: Infotainment diagram
Source: PL Research
September 18, 2014 15

16. KPIT Technologies
Exhibit 21: Expected to grow at a CAGR of 5%
8.75
8.50
8.25
8.00
7.75
7.50
7.25
7.00
6.75
6.50
6.25
6.00
Worldwide Automotive Infotainement Semiconductor Revenue ($ bn)
2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Source: IHS Automotive Research, PL Research
KPIT’s offers off‐the‐shelf tools for authoring, communicating and debugging. The
tools manage the entire diagnostics lifecycle. Their diagnostic tool come with in‐built
advance features like guided fault findings and remote diagnostics. In addition, they
significantly reduce the time needed for typical diagnostic use‐cases like creation of
diagnostic data, commissioning and validation of ECU while providing flexibility
across every kind of ECU project and highly user friendliness.
Exhibit 22: An overview on each of our “In2Soft Diagnostic Tools”
Source: Company Data, PL Research
The Smart and Connected Vehicle and the Internet of Things
Technology is evolving so rapidly it has become an integral component of everyday
life. Having uninterrupted connectivity is a must, even while driving. In fact, analysts
predict that by 2016 in‐vehicle connectivity and basic online content will become
critical buying factors in consumers’ car‐buying decisions in mature markets. This
dramatic convergence of technology in the car is quickly making it a key device in the
Internet of Things (IoT) with the ability to both receive data and feed it to the cloud,
to the traffic infrastructure, to other vehicles and more. As a result, automakers are
increasingly turning to leading technology companies to explore new ways to inform,
entertain and assist drivers to create a safer and more enjoyable driving experience.
September 18, 2014 16

17. KPIT Technologies
Exhibit 23: An example of intelligent transportation
Source: Cisco, PL Research
Exhibit 24: Schema of connected vehicle and transportation
Source: Cisco, PL Research
Exhibit 25: The smart and connected vehicle
Source: Cisco, PL Research
KPIT’s offering
KPIT’s M2M (machine‐to‐machine) solution enables mission critical machines of
customers to become more responsive, safer and smarter. We have harnessed our
capabilities, learning and experience in the traditional IT space and taken it to highly
sophisticated industrial machines, which are critical to our clients. Our M2M solution
aids monitoring of IT enabled devices for clients in the focus industries.
September 18, 2014 17

18. KPIT Technologies
KPIT’s M2M solution
 Transforms machines into intelligent devices that exchange real time data,
making such devices predictable and improving their performance
 Provides remote monitoring, operation and maintenance of industrial
equipment
 Provides reduction in data duplication and a concurrent increase in data
consistency, increasing the reliability, speed and efficiency of data usage
 Provides real‐time control over critical infrastructure and remote assets
 Optimizes productivity, asset management, energy management and enhances
safety and regulatory compliance
 Gives better visibility into operations and costs, thus, enabling improved
customer service and reduction in potential losses
 Optimizes energy use, enables better work force management, provides better
maintenance processes and enhances security, leading to operational
excellence.
September 18, 2014 18

19. KPIT Technologies
Income Statement (Rs m)
Y/e March 2013 2014 2015E 2016E
Net Revenue 22,386 26,940 29,606 33,547
Raw Material Expenses 14,640 18,180 20,443 23,144
Gross Profit 7,746 8,760 9,163 10,404
Employee Cost — — — —
Other Expenses 4,091 4,528 5,026 5,184
EBITDA 3,655 4,233 4,137 5,220
Depr. & Amortization 472 540 667 707
Net Interest 146 287 182 104
Other Income (177) 24 301 129
Profit before Tax 2,860 3,430 3,589 4,537
Total Tax 765 941 969 1,225
Profit after Tax 2,095 2,490 2,620 3,312
Ex‐Od items / Min. Int. 79 — — —
Adj. PAT 1,991 2,490 2,620 3,312
Avg. Shares O/S (m) 192.8 185.5 185.5 185.5
EPS (Rs.) 10.3 13.4 14.1 17.9
Cash Flow Abstract (Rs m)
Y/e March 2013 2014 2015E 2016E
C/F from Operations 1,203 1,030 1,307 3,588
C/F from Investing (3,503) (1,665) (888) (1,006)
C/F from Financing 2,726 787 (416) (462)
Inc. / Dec. in Cash 426 152 3 2,119
Opening Cash 1,467 1,893 1,813 1,816
Closing Cash 1,893 1,813 1,816 3,935
FCFF 1,894 1,407 419 2,581
FCFE 2,307 1,339 419 2,581
Key Financial Metrics
Y/e March 2013 2014 2015E 2016E
Growth
Revenue (%) 49.2 20.3 9.9 13.3
EBITDA (%) 67.6 15.8 (2.3) 26.2
PAT (%) 36.9 25.1 5.2 26.4
EPS (%) 26.4 30.0 5.2 26.4
Profitability
EBITDA Margin (%) 16.3 15.7 14.0 15.6
PAT Margin (%) 8.9 9.2 8.8 9.9
RoCE (%) 20.9 20.2 17.8 18.9
RoE (%) 22.8 21.5 18.9 20.2
Balance Sheet
Net Debt : Equity — — — (0.1)
Net Wrkng Cap. (days) — — — —
Valuation
PER (x) 15.3 11.8 11.2 8.9
P / B (x) 2.9 2.3 2.0 1.6
EV / EBITDA (x) 8.3 6.8 7.0 5.2
EV / Sales (x) 1.3 1.1 1.0 0.8
Earnings Quality
Eff. Tax Rate 26.7 27.4 27.0 27.0
Other Inc / PBT (6.2) 0.7 8.4 2.8
Eff. Depr. Rate (%) 10.9 10.4 11.0 10.0
FCFE / PAT 115.9 53.8 16.0 77.9
Source: Company Data, PL Research.
Balance Sheet Abstract (Rs m)
Y/e March 2013 2014 2015E 2016E
Shareholder's Funds 10,362 12,751 14,955 17,805
Total Debt 1,602 1,534 1,534 1,534
Other Liabilities 270 — — —
Total Liabilities 12,235 14,285 16,488 19,338
Net Fixed Assets 2,005 2,161 2,382 2,681
Goodwill 4,423 5,994 5,994 5,994
Investments 2,154 1,859 1,859 1,859
Net Current Assets 2,408 3,173 5,060 7,611
Cash & Equivalents 1,921 1,908 1,816 3,935
Other Current Assets 6,084 8,214 11,518 13,051
Current Liabilities 5,597 6,949 8,273 9,375
Other Assets 1,244 1,064 1,064 1,064
Total Assets 12,235 14,251 16,359 19,209
Quarterly Financials (Rs m)
Y/e March Q2FY14 Q3FY14 Q4FY14 Q1FY15
Net Revenue 7,028 6,779 7,001 6,897
EBITDA 1,088 1,042 1,130 832
% of revenue 15.5 15.4 16.1 12.1
Depr. & Amortization 148 135 135 162
Net Interest 74 79 71 40
Other Income 23 18 (76) 101
Profit before Tax 889 846 848 730
Total Tax 222 238 235 222
Profit after Tax 667 608 613 508
Adj. PAT 667 608 613 508
Key Operating Metrics
Y/e March 2013 2014 2015E 2016E
Total Volume (in hours) 12,018 13,461 15,009 16,885
Offshore Utilization 74.0 72.1 74.5 75.0
Re/US$ 54.5 60.7 59.8 59.0
SW Devp. Cost (% of sales) 65.4 67.5 69.1 69.0
S&M Cost (% of Sales) 6.9 7.4 7.4 6.8
— — — —
Revenue (US$ m) 410 444 496 569
EBITDA Margin Expansion/(Erosion) (bps) 179 (62) (174) 159
Tax Rate (%) 26.7 27.4 27.0 27.0
Source: Company Data, PL Research.
September 18, 2014 19

20. KPIT Technologies
Prabhudas Lilladher Pvt. Ltd.
3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai‐400 018, India
Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209
Rating Distribution of Research Coverage
34.5%
49.1%
16.4%
0.0%
60%
50%
40%
30%
20%
10%
0%
BUY Accumulate Reduce Sell
% of Total Coverage
PL’s Recommendation Nomenclature
BUY : Over 15% Outperformance to Sensex over 12‐months Accumulate : Outperformance to Sensex over 12‐months
Reduce : Underperformance to Sensex over 12‐months Sell : Over 15% underperformance to Sensex over 12‐months
Trading Buy : Over 10% absolute upside in 1‐month Trading Sell : Over 10% absolute decline in 1‐month
Not Rated (NR) : No specific call on the stock Under Review (UR) : Rating likely to change shortly
This document has been prepared by the Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India (PL) and is meant for use by the recipient only as
information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of PL. It should not be
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or completeness of the same. Neither PL nor any of its affiliates, its directors or its employees accept any responsibility of whatsoever nature for the information,
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September 18, 2014 20