KPIT quietly finalized its merger with the privately-owned Birlasoft. The new company is now called Birlasoft and will be an IT service pure-play. Birlasoft has carved out its automotive engineering business that will be called KPIT. It is planning to float KPI very soon, with the listing on Indian stock markets happening in March 2019.
KPIT will an automotive engineering pure-play with, in our estimates, LTM revenues of $240m. The company is high-growth, with, in our estimates, a 39% revenue growth in LTM revenues. It will be the third largest Indian ER&D service pure-play, after LTTS and Cyient.
KPIT’s financial performance has been superb, to say the least, and its flotation will provide much more insights on why and how it is growing so fast. We will also be watching its profitability and how it has organized its delivery network. It will be interesting what kind of market capitalization KPIT gets from investors.