KPIT to traverse the inorganic route

PUNE: KPIT Cummins InfoSystems Ltd is keenly looking at the inorganic route for growth. The company has made two acquisitions in the past — Cummins Infotech and Panex Consulting. According to the company, with the Cummins merger, it has gained a significant customer in Cummins Inc., and a stronger presence in the market in the manufacturing vertical.

The acquisition of Houston based SAP consulting firm Panex Consulting for $ 1.7 million was meant to fill the strategic gap in service offerings due to the demand for SAP. Panex has core competencies in SAP, BW, business intelligence and supply chain optimization. "Our strategy has not been to make acquisitions but make mergers where there is potential for growth and not situations where the company wants to sell and get out," explained KPIT Cummins chairman and group CEO, Ravi Pandit.

"We are looking at companies operating in our vertical where there is a cultural fit. We are also looking at client relationships that could be converted into star relationships. Practice areas in VLSI, embedded software and SAP are picking up. There are gaps in our portfolio and we are working on that," he said.

Pandit sees a clear pipeline of revenues to the tune of $60 million coming from star customers — both strategic as well as non-strategic. The company currently has around six star customers. Cummins Inc. is a strategic customer that would be contributing around $30 million to the company through work in embedded software, their JVs and BPOs. The non-strategic customers include Hitachi Unilever and customers in the banking sector. KPIT Cummins has set up an ODC for Unilever offering support for Business Intelligence systems through the offshore development center. A 24x7 helpdesk has been set up at Bangalore for this.

Pandit said that the company is closely looking at emerging trends in business intelligence, embedded software, pervasive computing and Internet to exploit possible opportunities.

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