 "KPIT Tech says worst is over after 21% fall in Q1 net profit Rs 24.22 crore")
The 21 per cent decline in net profit to Rs 24.22 crore in the June 2020 quarter was on the expected lines as clients cut back on spends during the coronavirus pandemic and the "worst is over for the company", small-sized tech player KPIT Technologies said on Tuesday.
The Pune-headquartered company's co-founder and chief executive, Kishor Patil, said the ongoing September quarter will be "flattish" and things will improve from the December 2020 quarter onward both from the revenue and profitability perspectives.
"The worst is over for us. There was a fall in revenue that affected the profits. We have signed two large deals in the past four months and I am confident of the future," Patil told PTI.
He said a few clients chose to defer technology spends because of the COVID-19 pandemic's impact on their businesses that led to a decline in revenue to Rs 492.7 crore from the preceding March quarter's Rs 556.28 crore and the year-ago period's Rs 505.7 crore. The company announced its earnings for the quarter on Monday.
Patil had guided towards a 15 per cent decline in revenue and has performed better than that. He said that despite the revenue decline, it has been able to hold on to the operating margins that came at 13.4 per cent.
From the third and fourth quarters, it is aiming to drive up the profit margins through levers including higher offshoring of work, he said, pointing to a higher proportion of work coming to India.
"The pandemic has made it clear that work can happen from anywhere. Ninety-eight per cent of our staff is working from home at present. So, the idea is to get a bigger share to India," he said.
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When asked if this will entail many of its associates returning to India, he said it is a possibility but added that the company hopes for more new business generation in overseas geographies that will help absorb the employees.
It is also implementing a strategy to consolidate presence at lesser locations, he said adding that Pune and Bengaluru will be the key centres in India and Munich in Germany.
Patil said the company will absorb all the 800 freshers who have been made an offer through campuses, but added that there will be no increments for its existing employees this year.
The company's shares on Tuesday closed 4.97 per cent higher at Rs 67.65 apiece on the BSE.
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