21 August 2018 After several years of coping with integration issues and legacy pressures in its IT services business, KPIT announced that it would demerge its Engineering business and merge the IT services bit with Birlasoft. KPITs Engineering business has been its strongpoint, exhibiting 16% revenue CAGR over the last five years. Birlasoft too has been under pressure because of issues in its top client and has witnessed a decline of ~4% in revenue over the last three years. However, we note that during this period, positioning, prowess and performance in the Engineering business has been strong; and a majority of the issues can be attributed to the companys presence and efforts in the IT services business. KPIT Technologies On completion of the transaction, we reckon the Engineering Services side should grow at a 20% CAGR.