#ROCE
In FY25, ROCE witnessed a decline as compared to FY24. This decline was on the back of lower profitability. In FY24, ROCE witnessed a decrease to 40% as compared to FY23.
In FY25, ROCE witnessed a decline as compared to FY24. This decline was on the back of lower profitability. In FY24, ROCE witnessed a decrease to 40% as compared to FY23.
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#SECTORIAL #POTENTIAL
โข The size of the retail apparel industry in India as on FY24 stood at ~โน5,74,000 cr out of which the ethnic wear comprises of ~30%. The total of Indian wedding and celebration wear about ~57% of the total ethnic business. (Source : Crisil Report) โข The ethnic wear industry is expected grow strongly in the future, on account of the increasing trend of multi-day weddings, wider acceptance of traditional outfits during festival celebrations and the emergence of brands in the Indian wedding and celebration wear market. This industry has been highly unorganized. โข Womenโs ethnic wear is the largest segment of the overall market as it has found acceptance in both daily wear and office-wear categories, apart from the Indian wedding and celebration wear category. It includes lehengas, kurtis, sarees and salwar kameez. Menโs ethnic wear is the second-largest category and has a share of ~10% of the overall ethnic market. โข The celebration wear industry in India is competitive, with several regional brands and unorganized retailers present in local markets across the country. The Indian celebration wear industry has also been a highly unorganized market. โข The penetration into the unorganized markets with increasing retail footprint will lead to better performance in this segment. โข Transition to indo-western and fusion wear, shift from tailored ethnic wear to ready-to-wear apparels, increasing trends of wearing ethnic in festivals and migration towards branded ethnic wear would be the key drivers of this industry.
โข The size of the retail apparel industry in India as on FY24 stood at ~โน5,74,000 cr out of which the ethnic wear comprises of ~30%. The total of Indian wedding and celebration wear about ~57% of the total ethnic business. (Source : Crisil Report) โข The ethnic wear industry is expected grow strongly in the future, on account of the increasing trend of multi-day weddings, wider acceptance of traditional outfits during festival celebrations and the emergence of brands in the Indian wedding and celebration wear market. This industry has been highly unorganized. โข Womenโs ethnic wear is the largest segment of the overall market as it has found acceptance in both daily wear and office-wear categories, apart from the Indian wedding and celebration wear category. It includes lehengas, kurtis, sarees and salwar kameez. Menโs ethnic wear is the second-largest category and has a share of ~10% of the overall ethnic market. โข The celebration wear industry in India is competitive, with several regional brands and unorganized retailers present in local markets across the country. The Indian celebration wear industry has also been a highly unorganized market. โข The penetration into the unorganized markets with increasing retail footprint will lead to better performance in this segment. โข Transition to indo-western and fusion wear, shift from tailored ethnic wear to ready-to-wear apparels, increasing trends of wearing ethnic in festivals and migration towards branded ethnic wear would be the key drivers of this industry.
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#COMPANY #OUTLOOK
โข In Q2 FY25, the company launched its new brand Diwas (menโs wear) which witnessed good traction. It is designed for the young generation and is available across leading marketplaces. It is available on the companyโs own D2C (direct to customer) website and MBOs. It is a new approach taken towards the brand Manthan. The company will be focusing on scaling up Diwas instead of Manthan for next 2-3 years. โข In FY25, the company will be taking orders for both Manthan and Diwas. โข Diwas brand is operating in โน1,000-โน2,000 per kurta price point and the same for Manyavar is โน2,000-โน6,000. โข Looking ahead, growth shall be boosted by relevant inventory & designs, robust store network, multi-dimensional marketing initiatives and strong back-end infrastructure. โข In Q4 FY25, the company rolled out 1 EBO of Twamev and Mohey, each. โข They have also launched perfumes under Manyavar brand (Essence by Manyavar) in October 2024 and witnessed decent traction. These were available in the top 50-60 stores of the company.
โข In Q2 FY25, the company launched its new brand Diwas (menโs wear) which witnessed good traction. It is designed for the young generation and is available across leading marketplaces. It is available on the companyโs own D2C (direct to customer) website and MBOs. It is a new approach taken towards the brand Manthan. The company will be focusing on scaling up Diwas instead of Manthan for next 2-3 years. โข In FY25, the company will be taking orders for both Manthan and Diwas. โข Diwas brand is operating in โน1,000-โน2,000 per kurta price point and the same for Manyavar is โน2,000-โน6,000. โข Looking ahead, growth shall be boosted by relevant inventory & designs, robust store network, multi-dimensional marketing initiatives and strong back-end infrastructure. โข In Q4 FY25, the company rolled out 1 EBO of Twamev and Mohey, each. โข They have also launched perfumes under Manyavar brand (Essence by Manyavar) in October 2024 and witnessed decent traction. These were available in the top 50-60 stores of the company.
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Vedant Fashions (Manyavar) 350-400
Expected level 500
Support 290
Expected level 500
Support 290
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KPIT Technologies Limited Company Details Report
In 2018, KPIT Technologies Limited took a major strategic decision to be a company that would be focused on automotive-embedded software rather than being a general software company. KPIT provides embedded software for the Automobile and Mobility Industry. The company is a leading software integrator covering prototype development, actual software development, validation and testing. With the changing structure of the mobility industry and the transformation towards software-defined vehicles, KPIT stands in a unique position to meet the needs of OEMs (original equipment manufacturer) and Tier 1 players. Further, to strengthen their capabilities in areas of software integration, and semiconductor technologies, KPIT acquired Path Partner Technology in FY22. In FY23, KPIT acquired UK-based SOMIT Solutions for ~โน75 cr and acquisition of four of the Technica Group companies for โน640 cr. Also, they signed an agreement to acquire remaining 75% stake in Future Mobility Solution GmbH (FMS) to build and augment their expertise in AD/ADAS. The 75% stake was acquired in Q1 FY24 which contributed $1.7 million to the revenue in the same period. The company services are categorized into Feature Development & Integration, Architecture Consulting & Middleware, and Cloudbased connected services. In feature development & integration, KPIT provides scalable solutions for Electric and Conventional powertrains, Autonomous Driving (AD) and Advanced Driver Assistance Systems (ADAS), Vehicle Engineering and Design. The companyโs expertise and experience in architecture and middleware development and consulting is renowned and expected to be a key driver of revenue and growth. In addition, KPIT has a complete suite of cloud-based solutions that cater to enhancing Intelligent Cockpits, Connected Vehicles, Cloud and Analytics, and Diagnostics. The customers are located at US/Europe/APAC region. To enable the company to serve their specific needs the company has set up legal entities in the respective geographies. During Q3 FY24, the company acquired ~13% shareholding in N-Dream AG, a cloud-based game aggregation platform in vehicles based in Switzerland. It paid โฌ2.7 million in primary investment and โฌ0.3 million in secondary investment. The company is one of the early-movers in the in-car gaming space. In Q1 FY25, additional 13% stake was invested.
In 2018, KPIT Technologies Limited took a major strategic decision to be a company that would be focused on automotive-embedded software rather than being a general software company. KPIT provides embedded software for the Automobile and Mobility Industry. The company is a leading software integrator covering prototype development, actual software development, validation and testing. With the changing structure of the mobility industry and the transformation towards software-defined vehicles, KPIT stands in a unique position to meet the needs of OEMs (original equipment manufacturer) and Tier 1 players. Further, to strengthen their capabilities in areas of software integration, and semiconductor technologies, KPIT acquired Path Partner Technology in FY22. In FY23, KPIT acquired UK-based SOMIT Solutions for ~โน75 cr and acquisition of four of the Technica Group companies for โน640 cr. Also, they signed an agreement to acquire remaining 75% stake in Future Mobility Solution GmbH (FMS) to build and augment their expertise in AD/ADAS. The 75% stake was acquired in Q1 FY24 which contributed $1.7 million to the revenue in the same period. The company services are categorized into Feature Development & Integration, Architecture Consulting & Middleware, and Cloudbased connected services. In feature development & integration, KPIT provides scalable solutions for Electric and Conventional powertrains, Autonomous Driving (AD) and Advanced Driver Assistance Systems (ADAS), Vehicle Engineering and Design. The companyโs expertise and experience in architecture and middleware development and consulting is renowned and expected to be a key driver of revenue and growth. In addition, KPIT has a complete suite of cloud-based solutions that cater to enhancing Intelligent Cockpits, Connected Vehicles, Cloud and Analytics, and Diagnostics. The customers are located at US/Europe/APAC region. To enable the company to serve their specific needs the company has set up legal entities in the respective geographies. During Q3 FY24, the company acquired ~13% shareholding in N-Dream AG, a cloud-based game aggregation platform in vehicles based in Switzerland. It paid โฌ2.7 million in primary investment and โฌ0.3 million in secondary investment. The company is one of the early-movers in the in-car gaming space. In Q1 FY25, additional 13% stake was invested.
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#SALES #GROWTH
In FY25, the revenue stood at โน5,842 cr, a growth of 20%. In cc terms, revenue was up by 21%. The growth was driven by middleware, powertrain, passenger cars & geographical growth uptick in Asia. Furthermore, growth in its strategic client accounts (Top 25) aided healthy results. TCV (new) was $925 mn, up by 18%. TCV includes the new partnership with Mercedez Benz. Revenue in FY24 was โน4,872 cr, up by 45%. Growth was broad-based across verticals, especially in the middleware, autonomous & connected vehicle domain. TCV for FY24 stood at $796 mn, down by ~20%. Deals were higher in FY23 due to $250 mn large deal with Honda. Geography wise revenue has depicted strong broad-based growth, especially led by Asia. Overall, higher efficiency, focus on strategic client accounts and improved net rate realisation led to a strong performance. In cc terms, revenue grew by 39%, v/s the management guidance of 37%. Organic growth was 32% out of the 39% total.
In FY25, the revenue stood at โน5,842 cr, a growth of 20%. In cc terms, revenue was up by 21%. The growth was driven by middleware, powertrain, passenger cars & geographical growth uptick in Asia. Furthermore, growth in its strategic client accounts (Top 25) aided healthy results. TCV (new) was $925 mn, up by 18%. TCV includes the new partnership with Mercedez Benz. Revenue in FY24 was โน4,872 cr, up by 45%. Growth was broad-based across verticals, especially in the middleware, autonomous & connected vehicle domain. TCV for FY24 stood at $796 mn, down by ~20%. Deals were higher in FY23 due to $250 mn large deal with Honda. Geography wise revenue has depicted strong broad-based growth, especially led by Asia. Overall, higher efficiency, focus on strategic client accounts and improved net rate realisation led to a strong performance. In cc terms, revenue grew by 39%, v/s the management guidance of 37%. Organic growth was 32% out of the 39% total.
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#EBITDA #GROWTH
EBITDA in FY25 was โน1,230 cr, up by 24%. Employee costs and other expenses were higher by 19% and 21%, respectively during the same period. Consistent revenue growth have aided uptick in profitability despite continued investments for growth. Additionally, higher fixed price contracts along with increased offshoring aided profitability uptick. EBITDA in FY24 stood at โน991 cr, a rise of 57% YoY. Employee expenses had risen by 44% due to higher wages along with employee additions while other expenses increased by 33%, majorly due to increased investments to scale up growth. However, higher revenue coupled with improved efficiency helped boost overall earnings.
EBITDA in FY25 was โน1,230 cr, up by 24%. Employee costs and other expenses were higher by 19% and 21%, respectively during the same period. Consistent revenue growth have aided uptick in profitability despite continued investments for growth. Additionally, higher fixed price contracts along with increased offshoring aided profitability uptick. EBITDA in FY24 stood at โน991 cr, a rise of 57% YoY. Employee expenses had risen by 44% due to higher wages along with employee additions while other expenses increased by 33%, majorly due to increased investments to scale up growth. However, higher revenue coupled with improved efficiency helped boost overall earnings.
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#PAT #GROWTH
In FY25, the PAT stood at โน837 cr, higher by ~40%. Finance costs were lower by 23% as the company continued to reduce debt of its subsidiaries while depreciation was higher by ~15%. Other income was higher by ~178% due to one-offs amounting to โน85 cr, mentioned during H1 FY25 & forex gain leading to increased profits. PAT in FY24 was โน599 cr, a rise of 56%. Finance costs witnessed a rise of 70% majorly due to expedition of debt payments. Depreciation costs were higher by 31% due to acquisition effects. Other income was also higher by ~51%. Forex gain stood at โน16.7 cr as compared to โน10 cr in FY23.
In FY25, the PAT stood at โน837 cr, higher by ~40%. Finance costs were lower by 23% as the company continued to reduce debt of its subsidiaries while depreciation was higher by ~15%. Other income was higher by ~178% due to one-offs amounting to โน85 cr, mentioned during H1 FY25 & forex gain leading to increased profits. PAT in FY24 was โน599 cr, a rise of 56%. Finance costs witnessed a rise of 70% majorly due to expedition of debt payments. Depreciation costs were higher by 31% due to acquisition effects. Other income was also higher by ~51%. Forex gain stood at โน16.7 cr as compared to โน10 cr in FY23.
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#EBITDA #MARGIN
In FY25, EBITDA margin stood at 21.1%. Despite ESOP costs, quarterly promotions and employee additions, margins expanded due to fixed cost leverage and productivity improvement along with operational efficiencies. The margin during FY24 was 20.4% as compared to 18.8% in FY23. It improved despite employee additions & certain impact of wage hikes done, majorly due to enhanced productivity and a better realized rate along with rupee appreciation. The margins were only marginally higher from the guidance of ~20%.
In FY25, EBITDA margin stood at 21.1%. Despite ESOP costs, quarterly promotions and employee additions, margins expanded due to fixed cost leverage and productivity improvement along with operational efficiencies. The margin during FY24 was 20.4% as compared to 18.8% in FY23. It improved despite employee additions & certain impact of wage hikes done, majorly due to enhanced productivity and a better realized rate along with rupee appreciation. The margins were only marginally higher from the guidance of ~20%.
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#PAT #MARGIN
In FY25, PAT margin improved to 14.3%. The healthy growth in net profit was aided by improvement in operating margins and higher other income on account of exceptional gains. Adjusting for one-time gains, margins would have been 13.1% for FY25, a growth of ~80 bps. In FY24, the margin was 12.3% as compared to 11.4% in FY23. The margins expanded majorly due to higher revenue growth & higher other income.
In FY25, PAT margin improved to 14.3%. The healthy growth in net profit was aided by improvement in operating margins and higher other income on account of exceptional gains. Adjusting for one-time gains, margins would have been 13.1% for FY25, a growth of ~80 bps. In FY24, the margin was 12.3% as compared to 11.4% in FY23. The margins expanded majorly due to higher revenue growth & higher other income.
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#ROCE
In FY25, the ratio witnessed an increase. PBIT was higher by ~37% at ~โน1,175 cr, driven by increase in operating profits. Capital employed increased by ~25%. ROCE was 43.96% in FY24. PBIT stood at โน855.3 cr while capital employed increased to โน2,577 cr.
In FY25, the ratio witnessed an increase. PBIT was higher by ~37% at ~โน1,175 cr, driven by increase in operating profits. Capital employed increased by ~25%. ROCE was 43.96% in FY24. PBIT stood at โน855.3 cr while capital employed increased to โน2,577 cr.
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#ROE
Net profit has increased by ~41%, while net worth was ~โน2,912 cr, up by 36%. Higher profits have led to an increase in ROE at ~33% during FY25. Net profit stood ar ~โน599 cr, while net worth was โน2,145.9 cr, which increased due to higher retained earnings. The ratio stood at 32% in FY24.
Net profit has increased by ~41%, while net worth was ~โน2,912 cr, up by 36%. Higher profits have led to an increase in ROE at ~33% during FY25. Net profit stood ar ~โน599 cr, while net worth was โน2,145.9 cr, which increased due to higher retained earnings. The ratio stood at 32% in FY24.
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#COMPANY #POTENTIAL
โข The global Mobility Industry continues to undergo a transformational change. Vehicle makers across passenger to commercial vehicles are investing in CASE (Connected, Autonomous, Shared and Electric) technologies to deliver and cater to the demands of the end consumers and policymakers. โข Software Defined Vehicles (SDVs) are gradually becoming the primary driver of the emerging future of mobility. Consequently, the core capabilities of OEMs, Tier 1 players and Mobility providers are rapidly shifting from mechanical hardware to electronic hardware and software. โข With the rising confluence of technology and automobiles, the vehicle software market is predicted to reach $35 billion (growing at a CAGR of 9%) by 2025. Software applications, operating systems and middleware are growing at an even faster rate, at a CAGR of 11%. Overall, the vehicle software market is expected to nearly double by 2030, fueled by the digital push among top OEMs. (Source: Automotive software and electronics 2030 by McKinsey & Company, S&P Global Mobility Report). โข In 2021, the automotive industry witnessed massive changes sparked by supply chain problems and the effects of the pandemic. In 2024, the global EV (electric vehicle) sales grew by 25% YoY to 17 million units. โข By 2030, the global automotive software and electrical and electronic components market is expected to reach $462 billion, growing at a rate of 5.5% annually.
โข The global automotive ER&D spend stood at $198 billion as of 2024 (Source: Maximize Market Research). It is expected to grow by 2032 to reach $392 billion. The top 20 ER&D spenders like Volkswagen, General Motors, Toyota, etc account for ~73% of the overall spend. In terms of geography for the automotive ER&D spend, Europe has the highest market share (~49%), followed by APAC (38%) and North America (13%). โข According to Grand View Research, the global EV market stood at $1,328 billion as of 2024 and is projected to grow at a CAGR of 32.5% from 2025 to 2030. Government policies and incentives worldwide are accelerating the adoption of Electric Vehicles. โข The SDV (software defined vehicle) market was $147 billion as of 2024 and is estimated to grow by a CAGR of ~41% by 2030. Enhanced safety & sustainability are driving the SDV industry growth by offering real-time monitoring, predictive analytics & autonomous driving capabilities. (Source: MarketsandMarkets) โข As per Gartner, by CY28, ~70% of the vehicles sold will have android automotive operating system which presently stands at less than 1%. As per McKinsey, the automotive revenue will further increase & diversify towards data driven services and on demand mobility service thus adding almost $1.5 trillion, or 30% additional revenue by CY30.
โข The global Mobility Industry continues to undergo a transformational change. Vehicle makers across passenger to commercial vehicles are investing in CASE (Connected, Autonomous, Shared and Electric) technologies to deliver and cater to the demands of the end consumers and policymakers. โข Software Defined Vehicles (SDVs) are gradually becoming the primary driver of the emerging future of mobility. Consequently, the core capabilities of OEMs, Tier 1 players and Mobility providers are rapidly shifting from mechanical hardware to electronic hardware and software. โข With the rising confluence of technology and automobiles, the vehicle software market is predicted to reach $35 billion (growing at a CAGR of 9%) by 2025. Software applications, operating systems and middleware are growing at an even faster rate, at a CAGR of 11%. Overall, the vehicle software market is expected to nearly double by 2030, fueled by the digital push among top OEMs. (Source: Automotive software and electronics 2030 by McKinsey & Company, S&P Global Mobility Report). โข In 2021, the automotive industry witnessed massive changes sparked by supply chain problems and the effects of the pandemic. In 2024, the global EV (electric vehicle) sales grew by 25% YoY to 17 million units. โข By 2030, the global automotive software and electrical and electronic components market is expected to reach $462 billion, growing at a rate of 5.5% annually.
โข The global automotive ER&D spend stood at $198 billion as of 2024 (Source: Maximize Market Research). It is expected to grow by 2032 to reach $392 billion. The top 20 ER&D spenders like Volkswagen, General Motors, Toyota, etc account for ~73% of the overall spend. In terms of geography for the automotive ER&D spend, Europe has the highest market share (~49%), followed by APAC (38%) and North America (13%). โข According to Grand View Research, the global EV market stood at $1,328 billion as of 2024 and is projected to grow at a CAGR of 32.5% from 2025 to 2030. Government policies and incentives worldwide are accelerating the adoption of Electric Vehicles. โข The SDV (software defined vehicle) market was $147 billion as of 2024 and is estimated to grow by a CAGR of ~41% by 2030. Enhanced safety & sustainability are driving the SDV industry growth by offering real-time monitoring, predictive analytics & autonomous driving capabilities. (Source: MarketsandMarkets) โข As per Gartner, by CY28, ~70% of the vehicles sold will have android automotive operating system which presently stands at less than 1%. As per McKinsey, the automotive revenue will further increase & diversify towards data driven services and on demand mobility service thus adding almost $1.5 trillion, or 30% additional revenue by CY30.
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#COMPANY #OUTLOOK
โข The elevated interest from clients in the areas of CASE (Connected, Autonomous, Shared, Electric), architectural changes, and SDVs (software define vehicle) is due to market trends and the acknowledgment of the potential value emanating from the transformation that the industry is undergoing. All of this points to robust demand over the next five-plus years. As a result of this, the company is positive about continuing the growth momentum well beyond. โข The management has avoided to provide any revenue guidance in lieu of the ongoing challenges & uncertainties. Once the picture is clearer in 1-2 quarters, they would come up with their guidance. Growth is anticipated to be broad-based in FY26, given a stable macro situation with meaningful growth to be seen in the commercial vehicle space. Additionally, growth in Asia would be driven by India, China and slightly by Japan, while South Korea would remain flattish. expansion could have an impact on these levers. โข The company intends to either maintain or increase margins and would provide guidance in the coming quarters. Positive levers like automation and AI could lead to some operating leverage while continuing investments for AI, tech, talent and market โข They believe that the uncertainty regarding tariffs would hover mostly around H1 FY26, post which the growth would accelerate as usual as they had conversed with many industry players and its clients to better gauge the sentiments. However, some of the deals won are already in transition phase thereby growth getting sustained in H1 FY26 despite uncertainty. โข Some large deals are anticipated to accelerate in the coming quarters, especially in the commercial vehicle space. Additionally, they could expect to add certain clients in the coming time. โข In terms of wage hikes, the payments would be more incentive based rather than fixed increases.
โข The elevated interest from clients in the areas of CASE (Connected, Autonomous, Shared, Electric), architectural changes, and SDVs (software define vehicle) is due to market trends and the acknowledgment of the potential value emanating from the transformation that the industry is undergoing. All of this points to robust demand over the next five-plus years. As a result of this, the company is positive about continuing the growth momentum well beyond. โข The management has avoided to provide any revenue guidance in lieu of the ongoing challenges & uncertainties. Once the picture is clearer in 1-2 quarters, they would come up with their guidance. Growth is anticipated to be broad-based in FY26, given a stable macro situation with meaningful growth to be seen in the commercial vehicle space. Additionally, growth in Asia would be driven by India, China and slightly by Japan, while South Korea would remain flattish. expansion could have an impact on these levers. โข The company intends to either maintain or increase margins and would provide guidance in the coming quarters. Positive levers like automation and AI could lead to some operating leverage while continuing investments for AI, tech, talent and market โข They believe that the uncertainty regarding tariffs would hover mostly around H1 FY26, post which the growth would accelerate as usual as they had conversed with many industry players and its clients to better gauge the sentiments. However, some of the deals won are already in transition phase thereby growth getting sustained in H1 FY26 despite uncertainty. โข Some large deals are anticipated to accelerate in the coming quarters, especially in the commercial vehicle space. Additionally, they could expect to add certain clients in the coming time. โข In terms of wage hikes, the payments would be more incentive based rather than fixed increases.
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