Why? KPIT Technologies Ltd. was recently engaged by the French Renault SA as a technology partner. Infosys Ltd. closed its biggest deal to date with the German Daimler AG less than two years ago. While Persistent Systems Ltd. Dassault Systems is one of its customers, Cyient Ltd. made his software know-how available to the aircraft engine manufacturer Pratt & Whitney.
Tata Technologies is no wimp either. In addition to the parent company Tata Motors Ltd. and Jaguar Land Rover includes Pune-based Airbus SE and Honda Motor Co. Ltd. to his customers.
With that in mind, let’s take a look at where IPO-going Tata Technologies is struggling in the Indian automotive technology space.
Tata Technologies
The Tata Motors subsidiary focuses primarily on the automotive industry, delivering product development and digital solutions to global OEMs and their key suppliers. They use this expertise to serve customers in the aerospace and heavy equipment industries.
Its differentiated capabilities in the new automotive trends – electric vehicles, connected and autonomous – set it apart from the competition.
The company categorizes its business as:
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Services: This includes the provision of outsourced engineering services and digital transformation services to clients.
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Technology solutions: These complement the range of services with their products and educational businesses.
As of December 31, Tata Technologies had 18 global delivery centers located in North America, Europe and Asia Pacific.
Tata Technologies counts Airbus and Honda Motor Co among its customers alongside Tata Motors and JLR (Photo: Unsplash)
Tata Technologies counts Airbus and Honda Motor Co among its customers alongside Tata Motors and JLR (Photo: Unsplash)
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IPO Details: Tata Technologies’ IPO will be an offer-only offer for 95,708,984 shares, giving Tata Motors a 20 percent stake in the company, according to the draft prospectus available on the Securities and Exchange Board of India’s website.
Tata Motors currently owns 74.69% of the company.
The size of the IPO, the proceeds of which will go to selling shareholders, has not been disclosed. Tata Technologies’ recent buyback valued the company at Rs 16,080 crore. According to this assessment, the bid size could be at least Rs 3,800 crore.
finances: For the nine months ended 31 December 2022, revenue increased by 15.30% to Rs.3,052.95 crore, according to DRHP, although net profit increased by 22.82% year-on-year to Rs.407.46 crore. The EBIT margin, a measure of operating profitability, improved from 15.97% to 17.99%.
KPIT Technologies
The Pune-based IT company is so focused on the automotive sector that “software-defined vehicles” or SDVs made it to the front page of its 2021-22 annual report.
This focus was manifested in the deal KPIT Technologies struck with Renault in November 2022. The French carmaker has brought the Indian IT company on board as a strategic technology partner for the development of SDVs.
Aside from that, the company works with the top 25 OEMs in the world, with its software in over a million vehicles, the company’s co-founder and chairman SB Ravi Pandit said in the annual report.
KPIT works with customers in the fields of electrification, autonomous driving, connected vehicles, software standardization and vehicle engineering and design. Almost 40% of sales come from programs and software for electric vehicles and from increasing the efficiency of conventional powertrains.
Renault has committed KPIT as a technology partner. (Photo: Unsplash)
Renault has committed KPIT as a technology partner. (Photo: Unsplash)
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finances: For the nine months ended 31 December 2022, revenue increased by 32% year-on-year to Rs.2,394 billion. The company increased its operating profitability to 15.89% from 14.34% in the same period, although net profit increased by 40.69% to Rs 2.75 billion.
During the October-December period, KPIT Technologies acquired Technica Engineering – an automotive electronics company in Germany and Spain – to build expertise in building a one-stop shop for software-defined vehicles.
Infosys
As an industry leader with Tata Consultancy Services Ltd. Infosys provides end-to-end software solutions for the automotive industry – from smart manufacturing to electrification and auto lending.
According to its website, the Infosys Automotive practice applies predictive insights across business cycles to achieve leaner operations and business agility. The digital transformation of the assembly line and supply chain mitigates risk by addressing shifts in the mobility landscape.
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The company’s cloud applications, including Infosys Cobalt, facilitate the automation of global manufacturing and logistics processes.
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Infosys supports manufacturers in the transition to autonomous IT operations through the use of AIOps. It streamlines big data management while supporting predictive analytics.
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Infosys ensures reliability by standardizing all processes and business functions – from research and development to dealer network management and customer service.
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The company also integrates immersive technology with role-based content to create an engaging learning experience for upskilling employees.
Infosys has signed its biggest deal yet with Daimler, the maker of Mercedes-Benz cars. (Photo: Unsplash)
Infosys has signed its biggest deal yet with Daimler, the maker of Mercedes-Benz cars. (Photo: Unsplash)
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In September 2020, Infosys signed what was touted as its largest deal with Daimler to power an infrastructure overhaul and migration to a hybrid cloud environment. The company then founded a 100% subsidiary – Infosys Automotive and Mobility GmbH & Co. – in Stuttgart. The deal aims to make the Bengaluru-based IT company a major player in the automotive technology space.
finances: For the nine months ended 31 December 2022, India’s second largest IT services company’s revenue increased 21.97% yoy to Rs 1.09 crore, although net profit increased by 9.38% yoy to Rs 17,967 crore rose. The EBIT margin was 21.06% compared to 23.56%.
cyient
Hyderabad-based mid-sized IT services company, which has been in the semiconductor systems business for more than two decades, specializes in silicon and software design solutions and services for the automotive industry.
The company builds solutions that enable zero accidents and a personalized cockpit experience for drivers and passengers, leveraging its capabilities in end-to-end automotive system development, including the ECU (electronic control unit).
finances: For the nine months ended 31 December 2022, revenue increased by 27.17% yoy to Rs.4,264.5 crore, although net profit contracted by 4.59% yoy to Rs.351.2 crore. Operating profitability fell from 13.60% to 11.65%.
persistent systems
The company focuses on digital engineering and uses the Internet of Things, cloud computing, analytics, artificial intelligence and machine learning to increase efficiency in increasingly automated production lines.
The company uses Dassault Systèmes’ 3DEXPERIENCE platform – a cloud-based digital engineering solution – to enable continuity, bring products to market faster and make smarter decisions.
finances: For the nine months ended 31 December 2022, the Pune-based IT services company’s revenue increased by 49.67% to Rs.6,096 crore, although net profit increased by 36.81% to Rs.670 crore. The EBIT margin, a measure of operating profitability, improved from 13.80% to 14.77%.
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