Focus on making timely investments in the right technologies to capture key opportunities: KPIT’s CTO

Five years ago, Pune-based KPIT Technologies demerged its IT services, merging that division with Birlasoft to shift its focus entirely to the automotive sector. In its new form, KPIT began operations in 2019 with a revenue run rate of $270 million (down from $600 million) and a workforce cut in half. Fast forward to today, KPIT has seen a 30% increase in revenue and a nearly 50% jump in net profit. In an interview with TechCircle, Anup Sable, the company's Chief Technology Officer, discusses how technology has driven KPIT's growth. Edited excerpts:

How has digital transformation helped in the evolution of automotive industry?

In recent years, the automotive industry has undergone significant disruption. First, the shift from traditional fossil fuels to electric vehicles transformed how cars are powered. Second, the vehicle's digital interface evolved, offering more features and information to users. Third, the rise of Software-Defined Vehicles (SDVs) revamped vehicle electrical architectures, allowing software integration to be faster and more efficient. These changes sparked massive engineering efforts globally. KPIT, with our strong market assessment process and forward-thinking approach, anticipated these trends. By investing early in tools, accelerators, and innovations, KPIT was well-positioned when the industry shifted, securing a leading role in meeting customer demands.

The automotive industry, one of the largest and most complex, leverages every major technological advancement. No consumer product matches the complexity of a car. Whether it's materials science, networking, electrical systems, chemistry, production processes, or artificial intelligence (AI) and quantum, all technological innovations eventually contribute to solving challenges in the automotive space. As each technology matures, it finds its application within vehicles, shaping the future of the industry.

Quantum technology, though in its nascent stage, has sparked a lot of interest from across the industry. How do you see this technology from KPIT’s point of view?

Quantum technology will find various applications, starting with logistics and fleet management, and evolving to advanced challenges like managing flight paths for flying cars using quantum computing. As these technologies mature, they'll become more practical for real-world use.

We continuously monitor technological advancements and assess the best course of action — whether to build in-house, partner, or acquire companies. We focus on making timely, strategic investments in the right technologies to ensure we capture key opportunities.

Speaking of M&A, has that been your major capability building strategy?

Without going into specifics, our approach is to continuously monitor global trends and evaluate our options. We have three main paths: invest internally, partner with others, or acquire companies. Management decides the best course of action based on what’s most suitable at the time. We’re always in a scanning mode, ready to act when something relevant arises.

For instance, with our recent Technica Engineering acquisition, we enhanced our competency in understanding and providing solutions for the latest vehicle architectures. As the industry shifts to newer architectures in the next 4-8 years, we’re well-positioned to remain at the cutting edge through this acquisition. Similarly, we’ll continue to stay alert for future opportunities.

Further, we engage in two types of partnerships: soft and hard. Soft partnerships involve collaboration on solutions, such as those with cloud providers and semiconductor companies. Hard partnerships, on the other hand, are more formal and structured. For example, we announced a joint venture with ZF (independent company “QORIX”) to develop middleware software, headquartered in Munich. Additionally, we invested in N-Dream, a company focused on in-vehicle gaming, further expanding our technological reach.

As vehicles get more software enabled, the cybersecurity risk also increases with it. What is KPIT’s strategy to combat these threats?

The idea behind designing software for vehicles is that most of their functionality will be driven by the software, allowing for updates and new features to be delivered remotely. However, this also introduces potential cybersecurity risks. Anytime a vehicle is connected externally — via Bluetooth, Wi-Fi, or software updates — new attack vectors are created that could be exploited by hackers.

As the industry advances, both technology and regulations are evolving to address these risks. Manufacturing standards and software development processes are being shaped to mitigate cybersecurity threats. While security can never be 100% guaranteed, a combination of regulatory measures and technological innovations is helping to reduce vulnerabilities and protect connected vehicles.

Several reports have indicated a burgeoning engineering R&D (ER&D) sector. How do you expect this domain to shape up in India?

The ER&D sector is growing, and more companies are turning to India to tap into its talent. KPIT has been a pioneer in this space, leveraging and developing talent for our needs. We anticipate more global companies establishing ER&D hubs in India.
With a team of 13,000 focused entirely on engineering, we are committed to meeting our growth projections. While I can't share specific numbers, we're confident in our position and actively driving efforts to achieve our targets.