KPIT, which supplies software-based options primarily for car companies, mentioned it should search for acquisitions in areas like semiconductors and ecommerce to get higher insights into the way it can create worth in these areas for its car prospects.“Increasingly more software program will get outlined by means of the chipset, so that is one space the place we wish to do extra acquisitions, which can give us extra insights,” mentioned Sachin Tikekar, president at KPIT.
The corporate is engaged on long-term monetisation options for purchasers, like ecommerce by means of linked automobiles, and that is one other space the place it could take a look at acquisitions sooner or later.
“Monetisation is not going to simply be promoting the automotive; they’re additionally wanting the potential for commerce and the way linked automobiles can grow to be avenues for income technology,” Tikekar mentioned.
The altering dynamics within the auto business worldwide will translate into larger progress for the corporate as demand for tech-driven options continues to extend.
“A lot of the automobiles have gotten software program pushed now. OEMs had been used to purchasing software program in bits and items and placing it collectively—that doesn’t work now,” mentioned Tikekar.
With software program rising as a key differentiator, automakers are doing their very own software program structure to be able to embrace the shift in the direction of autonomous and electrical automobiles.
Auto firms now discover themselves competing with the likes of Tesla, who’ve been software program pushed from the very starting, requiring these companies to overtake their strategy to software program and expertise of their automobiles.
Corporations are additionally working at newer fashions of monetisation sooner or later past simply promoting automobiles, prospects by means of linked automobiles.
“Excessive spends are going into electrification. If you happen to take a look at the variety of automobiles which are going to be electrified or going hybrid, about 18 new launches are anticipated within the US subsequent 12 months,” mentioned Tikekar.
Inside autonomous automobiles, most companies usually are not investing in full autonomy, however advanced-level help options, he mentioned. These are options that enhance driver security, and many others.
Whereas the corporate is specializing in its prime 25 purchasers who contribute nearly 90% of its revenues, Tikekar mentioned if it could get higher entry to a possible shopper by means of a strategic acquisition, then that can be one thing the corporate can be open to.
“KPIT has vital scale within the automotive vertical with a breadth of capabilities matched by few gamers,” mentioned Nitin Padmanabhan and Hiral Shah of Investec Capital Providers. “Automotive OEMs are taking on software program growth from tier-1s and on the similar time are additionally seeing the necessity to quickly create an EV portfolio together with AD-ADAS.”
Apart from this, the corporate is holding a watch out for the subsequent massive disruptors—firms like Tesla, which began with software program and constructed a automotive round it.
“We’re participating with a few of them, as a result of we do not wish to be blind sided by their success,” Tikekar mentioned.
