Good day, and welcome to KPIT Technologies Q3 FY 2026 Earnings Conference Call, hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank you, and over to you, sir. Thank you, Sagar. Good evening, everyone. On behalf of Dolat Capital, I would like to thank KPIT Technologies for giving us the opportunity to hold this earnings call. Now I would like to hand the conference over to Mr. Sunil Phansalkar, who is Vice President, CFNG, and Head of Investor Relations at KPIT, to do the management introductions. Over to you, Sunil. Thank you, Rahul. Good evening, and a very warm welcome to everyone on the Q3 FY 2026 Earnings Call of KPIT Technologies Limited. Since we are still in the first month of the year, I take this opportunity to wish all of you a great 2026 and beyond. On the call today, we have Kishore Patil, Co-founder, CEO, and MD, and Mr. Sachin Tikekar, President and Joint MD, Anup Sable, Board Member and COO, Priya Hardikar, CFO, and yours truly from Investor Relations. As we always do, we will have the comments about the performance on the quarter and the way forward in the opening, and then we will shift into question and answer mode. So once again, a very warm welcome to you, and I hand this over to Mr. Kishore Patil. Welcome to quarter three earnings call. Today, the way I would do is, I will go through some of the highlights of the quarter, and then, I would hand it over to Anup, whom you know. You are aware he is now the Chief Operating Officer. He used to be the CTO before this. So to explain what transformation we are doing in terms of business, specifically, how what we have been talking about the solutions, and there have been many queries about what does it actually mean. So he would like to take a couple of examples and explain so that you may get some clarity. So I think I'll start with the financials. So quarter FY 2026, year-on-year growth will be in terms of INR 9.4%, in terms of dollar, 3%. Quarter three CC, 1.5%. EBITDA growth of 6.8%. Post-absorbing increments, partial increments. Organic growth is negative, under 1% for the quarter. Overall, in the growth, if you really look at, growth was contributed, the business which has grown during the quarter is Europe, and off-highway commercial. That is the business which has grown. Overall, the net profit, excluding the one-time Labor Code impact, is INR 1.53 billion against INR 1.39 billion last quarter. The labor charge, we had the charge against the Labor Code is 469 million post-tax. We also paid the interim dividend during the quarter. The cash is about 9 billion after payment of 6.3 billion against the payouts of CareSoft and N-Dream during the quarter. The TCV value during the quarter is 202 million. Largely, it is across the geographies. Europe the highest, followed by U.S.A. and also something from China again this year from a Chinese OEM. As I have mentioned earlier, we have been... We believe that the business is changing, the OEMs are changing, the challenges are different. So overall, the overall business will change overall for the industry in coming years. While we continue to grow our existing way, existing business, and we do see we have a, you know, we, we do see the, those opportunities, we would like to move forward and make, change the business ahead of time, and that's why we are moving to the solutions-based, transformation. Now, there are a couple of, indications there. The fixed price is, our revenue is, 66%, against 59% last year. Per person revenue is up. We have continued the investment in this business, which is, more than INR 3.8 million during the quarter. This does not include the AI investments we are making, especially in addition to this. Plus, this does not include the investments which we have made earlier in certain acquisitions and, like Technica or the recent acquisitions like N-Dream and Care. So while we are here, I would like to mention that, overall, the way we look forward, we see many positives out of this quarter and last six months. The first thing is the focus on AI, and we have two projects or wins, which are in AI area, which we are working on in the production programs we are using. The second thing is, also on AI, we announced the partnership with Microsoft, and which is. Actually, Microsoft also made an announcement in terms of recognizing KPIT as a frontier partner of technologies. Similarly, another leading CRM company has also signed an agreement for our agentic solutions on their platform. In terms of micro-mobility, we have done a partnership with Hero Group, HMC Hive. That was the recent announcement we did about a month back. We do believe that we see that overall, commercial and off-highway, we continue to see traction, which is based on the back of CareSoft acquisition and our other offerings. In terms of geographies, overall, we see positive discussions in U.S.A., positive discussion in Europe, positive discussion, of course, in India, China, Middle East, and Southeast Asia, and in certain pockets of Japan and Korea. In order to really manage this transformation as well as the readiness for the growth in future, we have added a lot of leadership. The first one, of course, I mentioned to you, the Anup is now designated as Chief Operating Officer and key managerial person. Anup has been with the company for 31 years and has played multiple roles. We also have added multiple technology leaders in AI, also in certain domains, architecture, et cetera. Also, we have promoted some internal people in, in terms of, these positions, in addition to hiring from outside. In the geos, also some of the practice teams, we have at a senior level, we have hired from the industry. In view of our moment towards, solution-based business, and readiness, on the geo side, we have continued to add people again, from the purpose that the people can, really handle the complex, sales, both in case of AI as well as the solution, and we will continue to do that. This is where we are, and I would now request Anup to really take a few examples about the solution business. Thank you, Kishore. Hello, everybody. Good evening. I would first like to sort of demystify what is a solution, because many terminologies or definitions of solution could exist. You can imagine something like an iPhone is actually a product. That means you can literally pull it out of a box, and with a minimum configuration, that means if you have an older iPhone, you can scan a barcode, and eventually, the new iPhone can get configured to your all contact, et cetera, information that is there, and you can start using it literally within 10 minutes of buying it. That's a product usually, sort of most important attribute is it's mostly shrink-wrapped. It has a little bit of configuration to be done, like we spoke in terms of iPhone. When we talk about a solution, large part of the work that is required to be done for a solution is already ready with, you know, somebody like us. But there is some part of the work that has to be customized based on the customer's requirement. And these requirements could be different. These requirements could be more and less in certain cases of customer. These requirements could actually address certain internal complexity in terms of customer setup and the customer's product. And hence, there is a definite amount of work in terms of software development, in terms of validation that needs to be done to make the solution ready for the customer. I will give you 2 examples of what we mean by solution. So when we talk about, let's say, something that is pre-AI as a solution, there is an advanced feature inside the cars now, where you can use the phone as a key. Now, technically, from a user's perspective... Sorry, before technical, from a user perspective, what it means is that you can use the phone and not have a key with you. The car detects the phone at a particular distance, unlocks the car. The car also detects that the phone is inside the car and the door is locked, and then allows the vehicle to go in an ignition-ready state, so you can switch on the ignition and then start driving the car. And similarly, when you get out of the car, it can switch off. You move away from the car, it locks the car. Now, there are different technologies technically required, and it's a very complex system in terms of implementation. So you have multiple technologies like Bluetooth, ultra-wideband, Wi-Fi, 5G, all involved. Then you have challenges inside the car in terms of how many different computers does this particular system interact in terms of making the use cases work? Now, and of course, when you actually develop something like this, you need to make sure that you have integration with the Apple iPhone, but it also then works with the Android phones, and then it works with an Android, specifically with Samsung, and then specifically with other Android phones that are there. So all of this, large part of it is, testable, reU.S.A.ble, but a significant part of it is customized to what the OEM would like to have. And for this, KPIT has a solution, which is a combination of the test platform and then the number of test cases that are required for certain certification requirements. There is a consortium called the CCC Consortium that certifies the solution for this. So all this is ready. So when we go to the customer, we can actually present a full-fledged readiness in terms of getting the customer to a stage where a new phone or a new vehicle launch can be supported. Now, what is the advantage? There are a couple of advantage that happen because of this. One, if things are, more or less ready, that means the time required for this particular activity is less. Second, because you have done this for multiple instances, there is already a know-how, domain know-how, that is captured inside, which gives an advantage both in terms of quality and again, in terms of time. And of course, the overall cost for the customer is lower because most of the things are ready, and as a result, the profitability for KPIT would also be higher. This is one example of a solution. Now, I would take another example of a fully AI-based solution, because in every solution you can always have certain amount of AI to improve, the efficiency, improve the performance, but I'm talking about a fully AI-based solution. Now, for this, I will give you an example of how software development happens, especially in large teams. So when you want to develop a software, say, for example, what you see inside your vehicle for a Digital Cockpit, which is a combination of your central touch screen, the cluster, the colorful cluster that you have, and then certain lighting that is inside, ambient lighting that is there inside the car. Now, when you write the software for such a thing, the software is a combination of written software by OEM, so written software by the Tier 1, and then the various third-party suppliers, sometimes as good as 20 different suppliers. For example, Apple CarPlay, Android Auto comes from Google. So all these systems have to be combined together and validated. When the software development is complete and the integration starts happening, there are a large number of bugs or issues that come out, which are integration issues. Now, when you look at a complex system, significantly large software, the most critical operation that happens very close to the software or the vehicle getting launched is fixing all of these issues. Sometimes these issues could be in numbers of thoU.S.A.nds, if not hundreds, right? The most bottleneck operation in such a case becomes who actually decides where the problem originated from, because the software has been written by 20 different players. It is residing on 4 different computers. So where is the defect originating from, and how to go about fixing this problem? This is called a triaging problem. It is a very complex thing because not only you have to deal with complexity, but the number of people who can handle this in terms of understanding what the problem is and where the problem originated, are limited, and hence this operation gets bottlenecked. Now, this is a problem that we are solving by triaging as an AI-infused solution. So, when we get into the customer, when we have gone into the customer, we have understood what the source code is, we have understood what the architecture of the vehicle is, we have understood what the defect is, and then we have created an AI-based engine that allows what this one or two bottleneck resources used to do, to immediately be done by the AI. And as a result, again, significantly reduce the time to fix the problem. Also, the duration for which this bottleneck has happened, that also is significantly reduced. And of course, at the end, the customer gets quality as an output, and the vehicle launch happen on time. So I gave you two examples, one, which is very specific to a complex system, the iPhone case that I talked about, the phone as a key, key. And the second example, I talked about software development lifecycle, where we are actually solving a complex bottleneck took problem using AI, AI as the primary engine or tool, to fix it. This is. So there are multiple such solutions that we are going to focus on this year in terms of, you know, going behind the customers. These are being validated. These have been working with the customers in the last few years, and we feel confident that now we can actually go to more and more customers and allow them to leverage what we have. Thank you, Anup. So basically, we believe that this is the direction in which the clients are going, where they would like to have a solution ahead of time and can make it available to their customers in a shorter duration. And the full ownership is taken so that there are no delays, overheads, which is from the client side. We do believe that this may take, I mean, large part of our business to convert into this part. It may take between 12-18 months. But naturally, specifically, AI and some of the few solutions which we believe have potential, would start in the next three to four months. So, this is what I just wanted to mention today. I think we will be happy to take any questions. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on the attached phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Karan Uppal from PhillipCapital. Please go ahead. Yeah, thanks for the opportunity. A couple of questions from my side. Firstly, on the pivot to solutions-led offerings versus pure service-led model, which we used to have. So do we expect to gain market share from our peers, given our solutions? Or you expect that could the outsourcing of work increase from OEMs versus the work which they used to do internally? That is part one. And secondly, with this solutions-led offering model, do you expect any cannibalization of the existing revenue? If yes, if you can quantify it. Sure. Yeah, thanks for the question. This is Sachin Tikekar. So let me answer the first part. Obviously, the solutions, when you look at solving a client's problem, and Anup described two of them, what typically happens is, you know, in the second example, you saw that there is a hardware setup involved, there are tools involved, there is a workflow, and then there are many companies that are actually providing different kind of software. So if you have to provide a holistic solution, in order to leverage the solution and have the maximum benefit, you have to look at it holistically. So our first effort is to take a broader view of the problem and provide a comprehensive solution to solve the problem. Now, in this case, what happens is we end up cannibalizing someone else's business. That means we'll be able to do it cheaper, better, faster for the client. If there is an existing business, part of the business has been done by KPIT, then obviously that part gets cannibalized. But the thing is, when we provide the holistic solution, we get a much bigger wallet share. So that's the model that we are applying across the OEM. And the whole purpose is twofold. One is to solve the problem of the OEMs more comprehensively and help them get their vehicles in the production program cheaper, better, faster. At the same time, increase the wallet share for KPIT and also the margins. So yes, the simple answer is yes. This will lead to increase in wallet share. I think that's the answer to your first question. What was the second question? Does it cannibalize our revenue as well? Yes. Yeah, I think I answered that to some extent. In some cases, we'll do it proactively in the interest of the client, but we always want to solve the bigger question. So we will not just cannibalize our own revenue, we'll end up cannibalizing something much bigger. So net-net, there is a wallet share gain. Okay, thanks. Thanks for that. Second, on the geopolitical environment, with the new tariffs being announced by U.S. for new nations and new U.S. trade deal in question, how are OEMs reacting to it? Are they comfortable to spend on their new age R&D programs, or they may again pause before, you know, some clarity emerges? I will talk about European OEMs. If you look at it, they actually are, I think, we have been saying that, and you must have seen it, that they want to move towards a different supply chain in this case. And that's why, basically, even though there may not be a new spend, they are moving their spend from the local vendors to India. So that is certainly a clear trend, and that happens. The second thing, there they are trying to find out how they can get some new technologies. Some of the solutions we talked about, specific solutions, I think that they would like to go for. So I think the way they are looking at it, they are saving some money, they are investing cautiously in certain areas. Naturally, they are not spending all the money. But that is what is happening in Europe. In the U.S.A.- ... we believe that, the speed is very important because most of the OEMs in U.S.A. are delayed on their vehicle programs significantly. And I think that is where they are looking for solutions. And, some of the solution, as Anup mentioned, really reduces time to the production program significantly. And, at least, also with the quality, because I think the biggest issue, if you have studied, I think the most of the U.S. companies, they have a higher warranty cost overall. And, so basically, having it better quality and faster is important to them. But this is in pockets. Overall, it is also some specific to OEMs. Some OEMs are not spending, and they're really not strategically taking a view. Few of them are doing it in US, and also off-highway commercial, at this point of time, are positively looking at making a change towards the this. Yeah, just to add to Kishore's point, the macro reading that we have from different OEMs is, I think this has been going on for the last one year. They have figured out ways to. This may continue for a while. Every day, you know, things are changing, especially coming from the US. And hence, I think different alliances are getting formed. But I think the OEMs have figured out a way that this is gonna be way of life, and then they are prioritizing certain technologies and certain investments. At the same time, they're deprioritizing many others, so that they have enough money to respond to these changes and, you know, meet the expectations of their consumers. So there are one or two geographies which been impacted because of the uncertainty, which is Japan. Basically, if you look at their overall market has shrunk. Most of them were having the good share in US- Mm. which is under doubt. Many of them were investing into U.S. or Canada or Mexico. Now, many of them have kept their plan on hold, or that is not helping them. So that's the one region when they are getting impacted also. Okay, thanks. Thanks for the detailed color. Just last thing on the TCV. Kishore sir, TCV was a bit muted this quarter. How is the pipeline looking, and, what, what's the overall outlook for the FY 27, if you can elaborate? Thanks. I mean, the first thing is that, you know, during this time, I think you get the orders, you-- nobody is ready to sign a very long-term deal most of the time, but they will, they will still ask you. But, the point is, this is the last quarter, and it really depends upon what the budgets which are remaining with a particular OEM. So, this, I would not read too much into it. But, I... You know that we give any any understanding about next year, at around April. But, if I have to give you some understanding, I, I will make only two statement. One is, we believe that our last quarter, we will improve our growth will be higher. It will be the highest growth. I mean, anyway, we did not have much growth, but there still be the higher growth in the Q4. That will be the highest growth quarter performed this year. And our profitability will improve from what we have in Q3, in spite of our investment. This is, this is one statement. The second thing is, we feel reason that... I mean, and please take me that will continue to tell you at two, three, but I'm just giving you my feel right now, is as we will will for sure grow next year higher than this year. And that we believe we will be in a position to do it. Now, some of these transitions, which we talked about, exactly how much, when, time difference, we are little bit not sure, so we are not putting exact number right now, or we'll see what we can do in by April, what we can talk about this. But, this is at a high level color I can give you. Okay, sir. Thank you a lot. I'll follow back with you. Thank you. Thank you. The next question comes from the line of Nitin Padmanabhan from Investec India. Please go ahead. Yeah, hi, good evening. Wishing you all a very Happy New Year. I had a couple of questions. So one is, on the solutioning, I think when we listed in 2019, we actually, at that time, spoke about maybe having pre-built 15%-35% or 40% of whatever customer seeks to build, and that's tested to be error-free code, and thereby we accelerate for clients. I think this is more or less similar, but I think you're doubling down. So if you could give some context on what that doubling down is. And the second is a more conceptual question: Is that, considering that we are able to sort of up the ante on this and maybe pre-build a lot more, shouldn't it mean... And basically, at lower cost, right? Time to market is shorter. Shouldn't it mean that your deal velocity should be higher, right? Logically, because market share gains would reflect in higher deal velocity... So just wanted your thoughts there. Do you think that is something that we should start seeing soon, or that will sort of evolve over a period of time? How should we sort of think about this broadly? Lastly, if you could just give some sense in terms of, let's say if you look at U.S., you know, Europe and, maybe Japan, broadly, how are conversations or spends, from our perspective, maybe within the top three or four customers within each of those geographies? Is it... Just some color that you could give qualitatively would be very helpful. Yeah. So first thing is, thank you for reminding what we said in 2019. So I think at that point of time, if you remember, we were moving towards the domains, which was electrification, autonomous, you know, the infotainment, that time. Then we moved to digital cockpit, that kind of a thing. So in order to basically, we had about, we had created a certain, what I would say, solutions or ways... Not solutions, visible demonstrations of what we- the client will get ultimately. And I can say that actual U.S.A.ge of those into the actual delivery was not more than 5%-7%. Actual program, when we deliver, it was not more than 5%-7% overall. So it was more towards understanding the requirement, the client understanding what could be the functionality, what are the additional functionalities, what we could deliver, our ability, skills, and, you know, this is what we could do. Actually, I'm talking about the actual numbers, and this is what it is. Now, more and more, as Anup mentioned, this is not about the project, this is not about this is a full solution which you are giving to the client, and this includes people from clients who are working on this, with the people from us. There may be some people from other vendors, including some Tier 1s or this. So this is a more holistic solution which we are giving. So there is a huge difference. And this we are expecting... I mean, I don't know what over the period will happen, but at least 50-60% kind of U.S.A.bility benefit in most of the solutions. I mean, and this will get, as I mentioned, we have just set up this. About two to three months back, we started changing the making the changes. And that's why Anup has a clear goal of making bringing this transition. So next 6 months, I think we should give here, and after that we'll be in a better position to say. But of course, this we are doing because we expect that this will drive high quality growth for KPIT in the midterm. Nitin, I think there was an external factor as well, which was, you know, if you remember in 2019, this was the first time all the OEMs wanted to build software on their own. They started their own software companies, and they had the money and the time to do it. And the thing was, everything was built ground up. That was the approach that was taken, especially in all the SDV programs, if you think about it. Times have changed now. Nobody has the time and the money to do this, and plus, there is a lot of learning from, you know, all the programs that have been delivered. So the expectation is all of this will get cheaper, but done cheaper, better, faster. That's why we think that the adoption of our solution in the, you know, in today's time is, you know, it's likely to have much bigger impact. Absolutely, yes. Yeah. There was one last question, Nitin, which was about the spend on our clients from U.S., Europe, and Japan, and their spend. So, as you know, the pressure continues on everybody. But they have done reprioritization. And from our perspective, we see an opportunity for us to grow. One is Digital Cockpit, that is true across the three geographies. The second is obviously, as you get more and more connected vehicles with OTA in them, cybersecurity becomes a bigger concern. So we are seeing a lot of spend in cybersecurity. Third is, given different countries have different approaches towards powertrain. So multiple powertrain, you know, you cannot just have battery electric. The consumers want to have options. So, we see investment also in ICE now, you know, as far as the powertrains are concerned. In many countries like China, Navigation on Autopilot has become a default. You cannot sell an electric vehicle unless you have Navigation on Autopilot in China. It's going to the U.S. as well as to Europe. So that's another area. So these are the three, four areas, where we have strength, and we believe that, the spend is gonna get prioritized from the OEM's perspective. Last but not the least, the cost reduction, the vehicle cost reduction, from mechanical, electrical, electronics, and also software perspective is becoming more critical. And, with the acquisition of CareSoft, CareSoft's business, we are also ready to help the OEMs. These are the areas where we think- ... there is going to be lot more traction as we get into FY 2027, Nitin. Got it. So just one last one as a follow-up. So when you think about what has changed from then to now, as you said, obviously, right now their ability to spend is lower, and we are actually, from what work we are doing, we are helping them do it at a lower price quicker. Do you think that what we will see is maybe better margins because of the way we are approaching this, but lower growth versus historicals? Or do you think we will be able to get both because we'll get higher market share? So how are you thinking on this as you look at it going forward versus how it was in the past? See, I think we are looking at 2, 3 different ways. We certainly believe that we can increase our market share in a medium term. I cannot say next quarter or quarter after, but in medium term. But we also believe we will be in a position to have a better pact with the AI as well as the other normal solution we talked about, other adjacencies we are talking about, and we do believe that both the commercial off-highway and micro-mobility would really bring more revenues. So this is what we believe overall. So the... This is our growth strategy, and from that perspective, we do. We do believe that our, we, we will be making significant investments, and that's why I talked about also earlier, what investment we are making. We will be in a position to be in the ballpark of the margins we have, little here and there, but the similar margins in spite of the investment. But, in the midterm, I'm, we are very sure that the margins will improve. On the growth side, do you believe it is directionally? How are you thinking? You think in the context of- I mentioned that, I did mention earlier, I- You increase market share in the medium term. Got it. Got it. Yes. Yes, I got that. I got that. Okay, though. Perfect. Perfect, perfect. Yeah. This is helpful. Thank you so much, and all the best. Thank you. Thank you. The next question comes from the line of CA Garvit Goel from Sterling Alpha. Please go ahead. Hello. Anil? Yes. Sir, first question is on the changing strategy. A few quarters back, we were speaking about a different strategy, where we were speaking about getting the learnings from China and providing services to the European OEMs, right? So I'm just trying to understand, now we are speaking about different, altogether different strategy, so bringing some solutions. So first question is, when we are speaking about the solution, is it applicable to the existing order book or existing pipeline that we are having, or is it for the newer areas, newer upcoming pipeline that we will be getting in future, sir? I think it is both, and as you have seen that, and I think Sachin mentioned about that people prioritize what is required for actually them. So many times there is, there is a requirement, but they believe that certain features they want to put it in a car, they will prioritize it over some other things. So that's why, I mean, there have been many questions. I keep on saying I don't know what we call, whether it is called cannibalization or changing in the priority of OEMs or what. But that's why the decision happens on a, at that point of time from the OEMs. We are not saying anything else. China remains important. We talked about it. I think China - Chinese companies are very. The reason the Chinese companies have been success, successful is they understand the consumers very well, and they created many solutions or, which, features, which can go into the, in the car very quickly. So that remains, our learning and also the technology aspects, so we continue to do that. You might have seen the, this time, this is the second, OEM we have won from, Chinese, Chinese OEM, which we are very proud of. I mean, it's not very difficult to win a Chinese OEM. So I think, Not easy. It's not easy to win. It's not easy to win. And, so I think, Chinese strategy is there, and it will take some time, but we, we do believe that we will be successful over the period. So solution strategy is not a replacement to the, you know, the adjacencies we talked about, the defense, China, the European part of it. This is in addition to that? Yes. Understood. Does that answer your question? Yes, sir. Secondly, the indications that we provided last time in Q2 regarding H2 this year, they have not yet reflected in Q3 as far as margins are concerned. Last time we also spoke on FY 2027 to be a promising growth year. This time we are sounding a bit bearish while still guiding for a better FY 2027. So I just wanted to understand from you, like, how to interpret this. Means, what has changed over the last quarter, and are we, like, still confident for a very good Q4 that we guided last time and a very promising FY 2027? So how to interpret it, sir? So the first thing is, nobody was, Labor Code was being discussed for last three to four years, and it came in last three to four months... So nobody knows. It has one-time impact, and it has an ongoing impact, specifically for this industry. So that is the point number 1. Point number 2, I would say that, I mentioned to you about the overall investments which we will continue to make. And, I think we believe that it is very important from the company's strategy to continue to do that and actually double down on that. We have we will do that. Certainly, I would say that, quarter three, I had said that it will be... I think, quarter three, we have got a bit short, about $1 million or so in organic growth. But that happens in this kind of environment by even some movement of projects from now to next quarter or so. So these kind of changes happen in this kind of environment. And quarter four, I mentioned that based on what we think, it will be better than all the three quarters we had. It doesn't say much, but it will just says that there will be a positive growth organically, and our profitability will be still, including this cost, will be higher than what it is. So the quality of revenue should be better. And we also mentioned that the next year will be better than this year. Now, this is what we are saying based on the pivot we are taking in terms of solutions and this. As you know that we are a company which will take a leadership first and start working on that, and it has generally given us better results in the past. We have positioned ourselves and taken created a, you know, 4, 5 years back, we took a bet and we worked on it, which was very difficult for many people to understand, and we delivered on that. We do believe that this will be a bet similar. It may take some time, but this will be an important pivot for us. That's good, sir. That's it for my session. All the best for the session. Thank you. Thank you. Thank you. The next question comes from the line of Rishabh Rathi from Goldman Sachs. Please go ahead. Hi, good evening, and thank you for taking my questions. I was just trying to understand on businesses which we have already won over the past 12 months. In your view, what are some of the milestones which need to be crossed before we can see some of these revenues, some of these businesses accelerating into revenues? And just secondly, can you share any early learnings post the CareSoft acquisitions? What are the amount or magnitude of synergies you see from this asset? Thank you. So, I may say that, the pipeline, what we have won, we have won. I just said that the prioritization sometimes changes, so it gets slowed down. But, many of these deals are over three to four years, so I think these revenues, will convert. I mentioned last time, we had given a number also, that how much cannibalization has happened last year of, because of the drop. So, it doesn't reflect, exactly like what, what has been won, from that perspective. On the CareSoft perspective, I think the integration, et cetera, we are already in the market. We are, doing quite, moving forward, as, Mr. Tikekar mentioned. I think we are also adding to their capabilities and adding one and one plus one is, more than three. That's basically the potential. Also, off-highway commercial we see as a growth area. I mentioned that. CareSoft gives us some good leads into that path. I would say that this is where we are. Also, on N-Dream, which is a small acquisition, relatively, we see a high potential in that, specifically both in terms of growth and profitability. It is already in 2 million vehicles, and we expect it to be about 3 million vehicles next year. So this is how we start, and we are trying to see whether we can move, we can really leverage that platform for adding more services on back of this engine. Thank you, and all the best. Thank you. Thank you. The next question comes from the line of Vimal Jamnadas Gohil from Alchemy Capital Management. Please go ahead. Yeah, thank you for the opportunity, sir. Sir, I just had a question on the transition that we are making or the transformation that we are making. If you could take us internally, what are the metrics you're tracking to gauge the progress of this transition? And as investors, how should we look at what metrics should we track, which you disclose, in order to gauge how—what's the progress been over the next 12-18 months? The related question over there would be, ultimately, what are we looking at? What is the—what are the outcomes we are looking at? Maybe slightly lower in number. No. Okay, can you repeat the second part? So first is, you know, in the transition from services to solutions, what are, what, what are the key parameters we'll look at? Yeah, yeah. What- And internally, what are we tracking? And what is investors, how should we look at?... We are probably more assured on the progress? Yes. And the second related question, sir, over there would be, how should we then, what's the end outcome over here? Are we looking at stickier customers? Are we looking at accelerated revenue growth, maybe a few years down the line or maybe better margins? What's the end outcome? Yeah. Thank you. So, you know, from the services to solutions, the one metric that completely changes is what becomes most important to us is the revenue per employee. That's something that we started to also write in our report. That's one of the key measures that not only we track internally, but that's something that makes sense for the analysts and investors also to look at. I think this becomes the most important. Other than that, I think there are many others that we have listed out that basically change related to, you know, the progress that we are making in terms of building of the solutions, getting the market ready for that. And, you know, we have to also look at our CRM with a different lens given the transition. So, these are- Yeah. So I think, what we will do is, at the end of the year, we will come out, with a more detailed conversation on this, and, we will share, more details about it. Right now, we have some idea, but in the next three to six months, we will have a better idea. In three to four months, we will share something, but I guess in 6 months, we will be very sure about the criteria. As you know, in the last three to four years, we start sharing as many things as possible as soon as we have a better handle on. But we will share more at the end of the year. The second question is: What is the outcome? I think Mr. Patil already... You know what to expect. Obviously, increased wallet share from KPIT's perspective, and of course, in the midterm, you know, profitable growth. I think these are the two outcomes that we really expect in the midterm, as we transition from being primarily a services company to primarily a solutions company. Understood. Understood, sir. Thank you very much, and wishing you the very best. Thank you. Thank you. Thank you, Vinod. Thank you. The next question comes from the line of Ankit Agarwal from Yellowstone Equity. Please go ahead. Yeah. Thank you for taking my question. My question is related to Qorix as well as the solution-based shift. It sounds like what we are doing in Qorix is also solution-driven, although we are packaging it as a product. So just want to understand what is the difference, and also what is the traction we are getting on Qorix? Qorix is both a product and a solution. When typically the complexity of a middleware software is, you can never really take it shrink wrapped, but the attempt is to make it as shrink wrapped as possible. But whatever you deliver to the customer, there is always going to be an effort in terms of integration, the application software for that. So that is the explanation on whether the Qorix is actually a product or a solution. So it's, it's combination of both. So I think, as you can see, some quarter, this quarter, we have got a good profit. I don't know about the next quarter, so it is based on the licenses. I think one thing I can tell you is there are again multiple changes which are happening. One is the vehicle new vehicle programs have been pushed out because of the problems OEMs faced in the existing program, as well as the keeping the spending, I mean, I would say, postponing the spending on the new programs. So because of that, the middleware and operating system spend went ahead. And that's the reason it doesn't have as much traction as we had expected till now. But, we believe this will be, as you probably know, that this has become the part of a European Union software partnership, which the European companies have made. And, there are very significant OEMs who are a part of that. So we do believe that this is something, again, which will be a, this is very unique, and we feel that this will have its fair share in some time. Okay. So is it fair to say that Qorix is mostly focusing on middleware and architecture, whereas other solutions-based approach is granular across so many different groups? Yes. Actually, Qorix is less than architecture. It's mostly middleware. Architecture is a much more comprehensive subject, which KPIT is handling. It's not a part of the Qorix activity. Whereas KPIT is handling, you know, maybe, across all the domains now, including, because architecture is also a domain for us now. Including architecture domain, KPIT is handling solutions across multiple domains now. Okay. Okay. Yeah, that's, that's helpful. Okay. Thank you. Thank you. Thank you. Your next question comes from the line of Sandeep Shah from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity. In this pivot to solution-driven business, is it fair to assume as we have taken a lead in SDV ahead versus tiers? ...In terms of solution-based delivery method, we are planning to recruit the same thing, which will help us in terms of winning with other wallet share, and may help some of the Western OEMs, both in the U.S. and Europe, to launch the new model as fast as Chinese EV players or the OEMs are launching and taking the market wallet share. Yes, your line is not very clear, but let me explain what I understood out of the question. Is your question, to summarize, is: Is the solution offering that we have to the OEMs going to increase or better their time to market? Yeah. Yes, the answer is yes. Most of the solutions that we are talking about, some of them, definitely some of them are really about very, very difficult things that the OEM does during the development of a vehicle. And because we have these solutions ready, we definitely feel that the time to market will significantly decrease for the OEMs. Okay, okay. Just, another related question, more as a bookkeeping. In a pivot to solution, you will not change any accounting policy in terms of capitalizing the development cost. You may continue to not capitalize and take it to PNL. Is the understanding correct? As you have seen for many years, we have not capitalized anything unless there is a new investor into certain area. So, in the normal course of business, there won't be any capitalization. Okay. Thank you. All the best. Thank you. Thank you. The next question comes from the line of Samir Dosani from ICICI Prudential AMC. Please go ahead. Yeah, thanks for the opportunity. I hope I'm audible. Want to understand, I'm not sure whether this is already addressed. So Asia, as a geography, has been declining for a few quarters. And what I understand, we had a very, we had a mega deal here, we have a large client, and they've been, you know, they've been reducing spend in certain areas. So can you, can you, throw some light what will happen in Asia as a geography, and when will it restart growing for us? Yeah, that is my first question. We look at Asia in two regions. One is Japan, Korea, China. Second is India and Southeast Asia and Middle East now. You're right about a specific OEM. We've been doing a really large program, and all large programs come to an end, so we'll go through that. However, what we have done in Japan is we have started working with a couple of others, and hopefully, you know, over a period of time, that will give us some growth, not only in Japan, but also in Korea. And as Mr. Patil explained, we have started to see some wins coming out of China. So as a region, we believe that it will come back in some time. However, the India and Southeast Asia part will grow. We have. It's been growing for us, and we see a lot more growth now that India has become the focus for most of the OEMs across the globe. So it's not only the India OEMs, the existing OEMs, the new OEMs, new-age OEMs in India, but at the same time, the global OEMs want to come and look at India, India for India. And that poses an incredible opportunity for KPIT. And I think most of our solutions will be ready in time to help these OEMs launch new vehicle programs in India. So we remain very bullish on India, not only now, but in the foreseeable future. That's how I would... So, you know, I... Yeah, that's what I would say for now. So Asia will, will continue to remain stable, decline, and then start growing, like it will take 6 months, 12 months, like 18 months? How to think about that? That is my- Yeah, I think we'll see some ups and downs. With really large programs, we have to make some adjustments, so we'll see some ups and downs. But, you know, in next two or three quarters, we'll see growth coming back in Asia as well. Because there are... We've been sowing seeds into new OEMs across Asia, and, you know, some of them have started to grow, some will take a little bit longer. So, yeah, I would say, you know, by middle of next year, we should start to see growth coming back in Asia. What we said is, from Asia, we will, we have broken this into two geographies, as Mr. Tikekar mentioned, and that you will start seeing, that you'll start reporting also from the next year. And we see a significant growth in this India and other Southeast Asia, Middle East kind of a geography. And as we say, even China will do that. And we have in Japan and Korea is where we will see few ups and downs, but we'll stabilize it over. Got it, sir. That's good to hear. And second is, when you speak about consolidation, right? So, like, there are three buckets, where you can consolidate, right? One is obviously taking work or, you know, work that is getting done in the OEM, you outsource that, and gain wallet share. Second is you gain wallet share from, you know, on-site based vendors. And third is from offshore- ... already in Europe. So obviously, consolidation would be a factor of all three, but where is the maximum share coming from at this point of time when you consolidate vendors, you try to switch one change? Not exactly like that, but in Europe it is from the on-site vendors too. That's right. I think it's, it's all three. You know, in Europe, as Mr. Patil said, it's mostly consolidation, movement from largely local vendors to more of global vendors. And with solutions, you know, it really doesn't matter whether it's on-site or offshore, right? It's, it's the world becomes a level playing field. So we compete, and we, we win against the competition. Got it. Got it. That's, that's good to hear. And thanks for taking my questions, and I'll get back to you soon. Thank you so much. Thank you. The next question comes from the line of Bhavik Mehta from J.P. Morgan. Please go ahead. Hi, thank you. The first question is, you know, if you look at your peers' commentary over the last few weeks, everybody's talking about demand outlook, faster deal conversion to revenues, which should mean acceleration in growth going forward. So just to know, do you share the same outlook, or is it something different for KPIT? Peers have been talking about it with good growth in opportunity. Yeah. So, I think we have given the sense of what we are saying. We are not saying it is. I mean, we have mentioned how the different geographies are behaving. We, of course, as you know, that as compared to most of the other, we have a much wider scope in terms of clients and the market as well as the volume. We don't see that it's a general policy. That we are not seeing. And we are seeing actually the change in the behavior of OEMs and the requirements, and we believe that what steps we are taking are most important in terms of long-term growth potential, and that's why we are taking this growth. So we would not generally make a statement. We would say that off-highway commercial, there is a growth which, we would see, but not exactly the same statement in case of passenger, across on, on board. Okay. The second question is on the AI solutions. So, you know, we have seen a lot of IT companies, anyway, some of your peers try these solutions approach or IT-based approach in the past, but I don't think much success out there. So what, you know, what is different this time, which gives you confidence that, you know, the AI solution can become a bigger part of your business in the next two to three years? And is there any target you have in mind in terms of how much the solutions can contribute to revenues versus the cost of over the next three years period? Last six months, I'm personally actually executing projects where internally we are solving the problems using AI. That makes me more confident, makes us very confident in terms of what it can do and how it can be done. Okay, so we are very clear about what AI can deliver to our customers. I would suggest you also listen to the interview that Anthropic CEO had given during Davos. We are in full agreement with him, that we have the solution ready to solve our customers' problem. I think it is up to the customers' adoption now in terms of how they adopt AI quickly into their life cycle. But we are ready. Yeah. And I think what has changed from last time, there are two things. It didn't work as much, so, you know, a lot of lessons learned. And I think this time, most of the solutions have been vetted by the clients. And some of them are already been piloted during the course of this year and last. So that gives us a lot more confidence that, you know, this time it's gonna take some time, as Mr. Patil mentioned, you know, 12-18 months before we start to make the shift. And in the next couple of years, we would want majority of our business to come from solutions. Like, one thing I mention is, so we are focused only on mobility, and that gives a very different advantage as some. Okay. Got it. Thank you. Thank you. The next question comes from the line of Vidyadhar Ginde from Soham Asset Managers Private Limited. Please go ahead. Yeah, thank you. So my first question is that in the last few quarters, when your growth has slowed down, has your share of the pie gone down, or you've lost market share, or the pie itself for you has gone down, or is it both? So, basically, if you look at mobility from passenger car perspective, their spend has gone down by 20%-25%. It's dramatic. I think their volumes have gone down substantially, their profits have gone down even more. You know, except for one or two clients, we have not lost our wallet share in any of our top 25 clients. In case of majority, they have actually gained wallet share. So basically, the pie has shrunk quite a bit. And you know, that's the reality at this point. The other way to look at it, if you look at in industry, all other ER&D providers, and you look at their automotive business, mobility business, in the year-on-year, they have a significant reduction in the, in this sector. ... Okay. So my second question was, so your medium to long-term outlook, if I'm not wrong, will depend on whether these global OEMs, which dominated global market share, whether they can stop losing market share to the guys who are ahead in the new world, which is Tesla and the Chinese guys. So am I correct in assuming that that your medium to long-term outlook really depends on these guys, or them otherwise making dramatic market share gains in the challengers who are gaining market share? How would you explain that? There are three answers to your question. There are three answers to your question. First is, this was exactly the question people asked me in 2019. People said that there is a Tesla, and Tesla will take all the business from all the OEMs. That was 2019, 2020, and this, this was asked very often. That was number one. Number two, I would say that, we have started working with Chinese, and we have been successful in getting Chinese clients. This itself tells us that we are doing something right, and, we will - we do hope that... I mean, we, we, we are very sure that, this automotive business is so critical to the economy. This is, this forms roughly 15% of the GDP of most of the auto countries. So it's very critical, and many OEMs will survive. Actually, the transformation will help. I mean, we would be of help to them. Third is, we are also going into certain different adjacencies, as well as area like off-highway commercial, where we believe that we will be in a position to grow in that area. So that's, that's, if I would say, broad-based strategy we have adopted. Just to take this forward, you are reasonably confident that a lot of your global legacy OEMs will survive, stop losing market share. Is that the case? That, I will say that, they will continue to spend. That's what I would say. They will prioritize their spend, and they will like-- they would, take a call in terms of being which are the profitable lines versus an other line. So their volume, you cannot say, but the people will adjust their strategy to that line. And most of the OEMs will continue, but I'm sure there will be a few casualties. That's what we mentioned earlier. What sort of comes to my mind is the mobile industry, where Nokia, from being a market leader, you know, where it is now. So do you see at least all the guys put together, here, at least it's not just one Nokia, it's a lot of OEMs put together? There's a big difference in these two industries, because- You don't expect that to happen. No, no. That there's a big difference between these two, because the life of a shelf life of a of a- Mobile phone. Mobile phone versus the life of a car, which is there on the road for 12-15 years, is very different. The type, what it requires, is very different. So it's a different ecosystem and life cycle. Okay. Thanks a lot. Thank you. Thank you. Your next question comes from the line of Ankur Pant from IIFL Securities. Please go ahead. Hi. Thank you for taking my question. My first- Ankur, we are not able to hear you clearly. Could you be a bit louder? Is it better now? Yes, this is better. Yeah. So, thanks for taking my questions. I have two questions. The first is, as you highlighted, mobility ER&D budgets have fallen sharply last year. So just an initial sense of your conversations, what does it suggest for this year? A stabilization—I mean, do you expect stabilization? Do you expect decline to continue, or is there some growth also that you are building in? Just wanted some color on that. Yeah. Ankur, you know, as I mentioned earlier on, of course, all the OEMs continue to be under pressure, so the overall spend is not likely to go up. However, there are certain areas where they're prioritizing spend, and I called out those areas earlier, and those are the areas where we actually specialize. We have deep specialization. You know, Digital Cockpit, cybersecurity, then Navigation on Autopilot, and multiple powertrains. I think this is where they are prioritizing their spend, and we are also bringing in the cost reduction element from the vehicle perspective. So these are the five areas that are in fashion in the minds of the OEMs, and we are ready to take those on. Yeah. Thanks. And my second question is with respect to the solutions pivot. Now, historically, for AI and pre-built solutions, OEMs have been generally wary, given that there are risks involved in a vehicle. So, what is changing this time? And given the upfront nature of investments that you would need to make on this, what gives you the confidence that multiple solutions will see broad-based adoption across OEMs? So they would have been vetted by a few clients, but what gives you confidence in the broad-based nature of adoption there? Yeah, I think it is our experience. I think in most of the cases we know, and now the few more discussions we are having, it is not a choice for them. It is not IT, where they have a choice to do something or this or that. Here, they are stuck with the pre-production programs, and they are not sure whether they can really come out with a vehicle. This happened with two OEMs, and now we have some more discussions. And in order to take it out, there are hardly any alternative solutions, and where we are ready to take the whole responsibility. We are not just giving a tool, we are not giving just, we are not doing what they tell us to do. We are ready to take the full ownership and deliver. Perfect. Thank you, and all the best for CY 2020. Thank you. Thank you. The next question comes from the line of Rohan Nagpal from Helios Capital Management. Please go ahead. Hi, thanks for taking my question. Just wanted to follow up on the, on the customer project that you said is coming to an end in Japan. So I think after we announced the mega deal with Honda, JPY revenue went from being somewhere around JPY 10 million a quarter to all the way up to JPY 40 million, announced to JPY 30 million. Where does this sort of bottom out in terms of this engagement? Because I think at the time that the engagement was announced, we said that KPIT will work with Honda through 2030. Has that been part of the reprioritization in any way? I think, yeah, that is correct. We'll continue to work with them, and there are different programs we are continuing to work with them. And this program is, as other programs, it has delayed. So some of the new programs have been little bit, pushed out, and, some of these changes are because of that. But, we absolutely we are, strategically placed with, OEM. And we'll continue to work 2030 and beyond. Typically, our OEM engagements, if you have seen, many, there are many OEMs we are working for 20 years, and the business has not got down, it keeps on going up. So it takes some time. This was a very large deal, and in the specifically, I talked about the Japan part, where the economy has got impacted, specifically through the uncertainties and et cetera. So there are some yeah, what I would say, the delays in the production program in delivering the whole to for the taking of the new programs, investing into new programs. And that may impact a little bit. It's not. It It will impact to some extent, but it is not going to be like, it will not going to be a zero or nothing. Okay. But are we close to steady state right now, or is there more sort of? For that, we could get a better handle. So I would say, we don't know. In one or two quarters, it may go down further or not. But over the period, if you look at the end of the year, we would be more because then the new opportunities which are happening, new programs which are happening will catch up. So it's very hard to tell quarter to quarter client-wise. We'll never, never give any answer on this. Fair enough. Okay, that's it from my end. Thank you. Thank you. Thank you. The next question comes from the line of Karan Uppal from PhillipCapital, India. Please go ahead. Yeah, thanks for the follow-up. Just a bookkeeping questions. So interest cost has inched up, you know, in last few quarters. Do you expect this to remain elevated in next few quarters or maybe in FY 2027? And secondly, depreciation has also increased to INR 81 crore after full integration of CareSoft. So shall we expect this depreciation line item to stabilize from here on? Yes, depreciation line item will stabilize. This quarter, it had a full impact of N-Dream customer intangible as well as one month of CareSoft, so it will stabilize. Second question was on the interest cost. In interest cost, we did have interest cost on the borrowing that we had last previous quarter, as well as some of the Ind AS cost on the goodwill calculations and the acquisition accounting. So yes, both these costs will stabilize now. So Priya, this interest cost, shall we assume this INR 23 crore as a run rate for both, you know, for future quarters? No, it can lower a little bit. But, yeah, more or less in the same range. Okay. Okay, thanks. Thank you, and all the best for everything. Thank you. Thank you. I think we are already over time, so I think we should end the call now. Yes. So we'll take this as the last question, and I now hand the conference over to the management for closing comments. Thank you very much. So thank you everyone for being on the call, and wish you all the best. Thank you. Bye.