On January 25, 2024, Tata Technologies Limited (BSE, NSE: TATATECH) announced its Q3 2023-24 results, reporting growth all the way with Operating Revenue up, overseas business doing well, and key deal wins.
Table of Content
Tata Technologies Q3 Results Takeaways
Delivering sequential and resilient growth, the tech major displayed the following in terms of financial metrics in Q3 FY24:
- The Company’s Total Operating Revenue was up by 14.7% YoY and up by 1.6% QoQ to reach ₹12,895 million.
- In USD terms, the Company’s Total Operating Revenues increased to 0.9% QoQ and were up by 13.4% YoY to reach $154.8 million.
- The Services segment Revenues of Tata Technologies rose by 8.3% YoY to touch $120.2 million.
- Regarding Constant Currency, the Services segment Revenues rose 5.8% YoY.
- In Q3 FY24, the Company witnessed a continued boost in the customer ramp-up activity, with 39 customers of the Company now in the million-dollar-plus Revenue bracket, versus 34 at the close of Q3 FY23.
- The Company’s Operating EBITDA stood at ₹2,366 million. The Operating EBITDA margin was at 18.3%, a rise of 140-bps QoQ, led by improved gross margins in the Services segment of the business.
- The Net Income stood at ₹1,702 million and the Net margin was at 13.2%.
- The Company added 172 employees in the quarter, making the workforce strength equal to 12,623.
- The Company witnessed a 180 bps sequential improvement in (LTM) attrition, reaching 15.4%.
- The Company has signed off on a key collaboration with Agratas to design the best-in-class battery solutions.
Additional Read: Q3 Results Dashboard
The Management’s Take on Q3 Results
Both the CEO and MD, and the CFO, of Tata Technologies Limited, had some key aspects of Q3 results to share and these are highlighted below:
- The Company delivered sequential growth and a robust operating EBITDA margin of 18.3% in Q3 FY24 and still made strategic investments to enable future growth.
- The Company’s deal win momentum has remained strong, with 5 large deals won in Q3 FY24, including one with more than $50 million in TCV and another with $25 million in TCV.
- The Company stays positive on client spending in the vertical of Automotives, as OEMs work towards becoming electric, and propel towards other alternative propulsion mechanisms.
- The aerospace industry appears upbeat, and the Company has witnessed strong demand in this space.
- The Company is investing in at-scale building capabilities and remains positive about the fundamentals of its business in the long run.
- The Company, in Q3, has largely concentrated on cash flow generation and profitability.
- Margins have stayed robust in a sluggish quarter and this is representative of the Company’s operational vitality and good execution.
- Long-term strategies to grow margins include further offshoring, boosting relationships, and leveraging business operations.
- The Free Cash Flow to Net Income conversion has stayed strong, reflecting the Company’s path to positivity.
Financial Results at a Glance
Here is a glimpse of the financial results of Q3 (figures in ₹ Mn as reported by the Company, except where specified otherwise):
| Metrics | Q3 FY 2023-24 | Q2 FY 2023-24 | QoQ % | Q3 FY 2022-23 | YoY % |
| Revenue from Operations | 12,895 | 12,692 | 1.6% | 11,239 | 14.7% |
| Gross Profit | 3,663 | 3,428 | 6.9% | 3,266 | 12.2% |
| Operating EBITDA | 2,366 | 2,143 | 10.4% | 2,058 | 15.0% |
| Net Income | 1,702 | 1,604 | 6.1% | 1,484 | 14.7% |
| EPS (diluted) in ₹ | 4.19 | 3.95 | 6.1% | 3.65 | 14.8% |
Additional Check: Tata Technologies Share Price
Q3 FY24 Result Summary
Tata Technologies, an international product engineering, and digital services company that concentrates on fulfilling the mission to help the world drive, build, fly, and farm by enabling its clients to realise enhanced products and deliver optimal experiences, is a key part of the Tata Group of companies. Large and small manufacturing firms rely on the Company’s legacy expertise to guide and support them to conceptualize, develop, and realise better products with the qualities of safety and cleanliness for improving the quality of life for the stakeholders involved.
Boasting a global footprint, Tata Technologies has generated exemplary results for Q3 FY24, as Revenue is up, especially in the Service segment of the business. With Net Profit increasing QoQ, the Company has shown resilience and a competitive edge in a seasonally weak fiscal quarter. Earnings before Tax and EBIT have remained constant YoY, while the Company’s USD Revenue has made up a large part of its overall Revenue in Operations. Despite the quarter being traditionally sluggish, the Company has managed the conclusion of a large deal, plus a few more major deals, spurring growth in Q3. While the Company may have had a relatively muted conclusion to 2023, it is optimistic about its bullishness in the long term.
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Source: Tata Technologies Limited Investor Presentation on BSE
