KPIT Cummins to raise revenues from engg services

MUMBAI Thu Feb 14, 2008 7:41pm IST

Related Topics

MUMBAI (Reuters) - Software and engineering services firm KPIT Cummins Infosystems Ltd is looking to make high-yielding engineering services its dominant revenue earner in three years, a top official said on Thursday.

"We are focussing on boosting revenue from engineering services,especially in our niche segment of embedded electronic software," President and Executive Director Girish Wardadkar told Reuters in an interview on the sidelines of a conference.

It is targeting raising revenues from the segment to 45 percent in three years from 25 percent now, and reduce IT services contribution to 40 percent from 55 percent, he said. The rest would come from back office services.

The company is looking to broaden its automotive segment to include aerospace and marine transportation, he said.

"Focus on the engineering services is essential and our solution for continued growth for the next two decades."

"Opportunities in the engineering space worldwide are reducing but in our niche area we see prices remaining secure," he said.

Revenues from parent Cummins Inc is also seen going down to 25 percent from just about 40 percent in the next five years, he said.

"Our engagement with them is increasing but the share of non-Cummins revenue is increasing. This will be even more so with our renewed focus on engineering services."

The company also sees higher price realisations in its niche area of operations.

"Once the cost arbirtrage advantage has worn off, it will be about non-availability of resources and capacity availabilities," Wardadkar said refering to the demand drivers.

Last quarter the company obtained 12-15 percent higher rates for renewal of master service agreements and 3-5 percent higher prices for new contracts.

The company is planning to add 2,400-2,600 people in 2008/09, to its existing base of 4,152 employees, he said.

Engineering services account for roughly 11 percent of India's total outsourcing export revenues and is estimated to reach $4.5-4.6 billion by the end of the current financial year, Nasscom estimated.

India's total software and services exports are expected to cross $40 billion in 2007/08, according to the Nasscom review.

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Article 

Indians in Iraq

Indians in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Test Match Postponed

Test Match Postponed

First test against India postponed after death of Hughes  Full Article | Related Story 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Banking Sector

Banking Sector

After record deal, more India bank takeovers on cards  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Nigeria Violence

Nigeria Violence

Bombs, gunfire kill 81 at crowded mosque in Nigeria's Kano  Full Article 

Movie Review

Movie Review

D’Silva's “Ungli” just skims the surface  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage