KPIT has redefined its trajectory by betting on automotive software

The biggest challenge for any legacy business is breaking free from its deep-rooted mindset. Reinventing the way a company operates requires more than just strategy-it demands vision, risk-taking, and an unwavering belief in transformation.

Kishor Patil, 63, a chartered accountant-turned-entrepreneur, embodies this spirit. Having co-founded the IT services firm in 1990, he steered it to a successful IPO by 1999 and built it into a Rs 4,300 crore market cap company by 2018.

But instead of getting comfortable, Patil made a bold move-divesting 70% of his business to Birlasoft and sharpening his focus on automotive engineering and mobility solutions.

Today, KPIT Technologies, also known just as KPIT, is a Rs 33,082 crore enterprise, having grown multifold since 2019. It is one of the largest independent software and system integration partner to the mobility ecosystem with 13,000 employees.

It is because of his gumption he is the joint winner in the Tech Titan category.

Inspired by firms like Accenture and PwC, where professionals transitioned from traditional domains to technology, Patil aspired to build something global. “In India, engineers were leading big companies, and we thought, why not us,” he recalls.

With no prior experience in technology, Patil immersed himself in learning. “I studied, took courses, and approached smaller clients to understand the business,” he says.

By the early 2000s, KPIT faced a crucial crossroad. The IT export market had slowed post-9/11, the dotcom bust, and the end of Y2K. “We had to make a strategic decision,” Patil says. While most firms doubled down on banking, finance, and telecom, KPIT took a contrarian route—manufacturing.

This decision paved the way for a game-changing partnership with Cummins around 2002 to establish KPIT Cummins Infosystems, catapulting the JV’s revenues from $10 million to $100 million.

Yet, the biggest inflection point came when KPIT decided to carve out a niche in the global automotive software market. The company underwent a radical transformation in 2019-merging with Birlasoft only to demerge and create two focused entities.

This saw KPIT divest over 70% of its business to zero in on automotive software solutions.

However, numbers tell a compelling story. Over the last five years, KPIT’s revenue has grown multifold, profits twelvefold, and its market capitalisation has skyrocketed.

“Focus is a powerful concept, and it has given us a tremendous edge,” Patil asserts.

Tech Leap

1. For legacy companies, Patil believes the most difficult hurdle isn’t technology-it’s the mindset shift
2. It identified electrification, autonomous tech, and software defined vehicles as the future
3. Over the last five years, KPIT’s revenue has grown multifold, profits twelvefold, and its market capitalisation has skyrocketed
4. The firm is now a leading software and system integration partner to global automotive giants

Betting on the future

“We believed in the future of electrification, autonomous driving, and middleware operating systems,” says Patil. KPIT saw the global automotive industry undergoing a seismic shift, and it wanted to be the driving force behind this transformation.

But why only automotive? “We wanted to lead in a space undergoing significant disruption. Electrification, autonomous driving, and software-defined vehicles were reshaping the industry. We saw an opportunity to be at the forefront of this change,” Patil explains.

Additionally, the industry’s technology spending trends played a pivotal role. "For years, banking was the biggest spender on technology. Now, it’s automotive," he says.

Speaking to Business Today, Atul Thakkar, Director—Investment Banking, Anand Rathi Advisors, says KPIT has always been deeply entrenched in the automotive sector, largely due to the founders’ strong industry connections, particularly with Cummins.

“One of KPIT’s standout traits is its forward-looking approach, consistently investing north of 25% of its free cash flow into R&D. This commitment ensures the company remains ahead of industry trends, particularly in AI and digital platforms,” Thakkar adds.

AI and the next big leap

KPIT is ensuring it remains ahead in AI advancements. “AI will play a big role in three areas: how we run the company, how we develop software, and how we offer differentiated solutions to clients,” Patil says.

Recognising this, KPIT brought in a dedicated Chief Technology Officer (CTO) for AI just six months ago.

For legacy companies, Patil believes the most difficult hurdle isn’t technology-it’s the mindset shift. "Leaders must lead by example. Small process changes can drive big transformations," he states.

To cultivate innovation, KPIT established forums where employees could present ideas and receive funding to develop them.

Patil is optimistic about India’s potential as a global automotive powerhouse. "With the right ecosystem, India can become a hub for automotive innovation," he says.

He highlights the growing start-up culture, the presence of OEMs, and the semiconductor industry as key enablers. “India has everything it needs to succeed. It may take time, but I believe we will be a major player in the global automotive industry,” he affirms.

KPIT has an ambitious road map-leveraging cutting-edge technologies, expanding into markets like China, and strengthening its footprint in Europe and the US.

Emerging areas such as cybersecurity, semiconductors, and cloud computing are also on its radar.

Patil’s ambitions of establishing India as a key player in the global automotive software industry is apparent. “The future holds immense possibilities, and we’re ready to drive the change,” he concludes with a hint of optimistm.

@PalakAgarwal64