Earnings Review
Tata Tech Jul-Sept PAT falls 3% QoQ misses Street view
This story was originally published at 21:47 IST on 28 October 2024
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--Tata Tech Jul-Sept consol net profit INR 1.57 bln vs INR 1.62 bln qtr ago
--Tata Tech Jul-Sept consol revenue INR 12.96 bln vs INR 12.69 bln qtr ago
--Tata Tech Apr-Sept consol net profit INR 3.19 bln vs INR 3.52 bln year ago
--Tata Tech Apr-Sept consol revenue INR 25.65 bln vs INR 25.27 bln year ago
--Tata Tech Jul-Sept consol operating EBITDA INR 2.36 bln, up 1.9% on qtr
--Tata Tech Jul-Sept consol EBITDA margin INR 18.2%, unchanged on quarter
--Tata Tech: Net headcount addition 175 in Jul-Sept; total workforce 12,680
--Tata Tech Jul-Sept services segment sales at INR 10.05 bln, up 2% on qtr
--Tata Tech: Confident that Oct-Mar will be better than Apr-Sept
--Tata Tech last 12-month attrition at 13.1% in Jul-Sept vs 13.7% qtr ago
--Tata Tech Jul-Sept consol EBIT margin 15.9%, unchanged on quarter
--Tata Tech Jul-Sept consol sales up 0.8% on quarter in constant currency
--Tata Tech Jul-Sept services segment sales up 0.3% QoQ in constant currency
By Jahanvi Kothari and Arya S. Biju
MUMBAI – Tata Technologies Ltd. reported lower-than-expected earnings for the September quarter. The company reported consolidated net profit of INR 1.57 billion in the latest quarter, down 2.9% from the last quarter. Analysts had expected the bottom line to be in the range of INR 1.68 billion to INR 1.72 billion. The company's consolidated revenue for the September quarter rose 2.2% sequentially to INR 12.96 billion, in line with analysts' range of INR 12.94 billion to INR 13.26 billion.
On a year-on-year basis, Tata Technologies' bottom line fell 1.85% and top line rose 2.15%. Other income fell to INR 164.3 million from INR 298.5 million in the year-ago period. For Apr-Sept, the company's net profit fell 9.2% on year to INR 3.19 billion, while revenue rose 1.5% to INR 25.65 billion.
Total expenditure, including finance cost, was at INR 10.95 billion in the latest quarter against INR 10.72 billion a quarter ago. Finance cost was lower at INR 46 million from INR 47 million a quarter ago. The net tax outgo for the September quarter was at INR 600 million as against INR 576 million a quarter ago.
The company's earnings before interest, taxes, depreciation, and amortisation margin fell by 130 basis points on year to 18.2%, but was unchanged on quarter. The company's operating EBITDA was 2.36 billion, up 1.9% on quarter.
The EBITDA margin of the company for the quarter was supported by improvements in utilisation and increased offshoring, Tata Technologies said. The company retained its earnings before interest and tax margin for the September quarter at 15.9%, unchanged from the June quarter.
"We remain focussed on maintaining a balanced approach of upholding operating discipline while strategically investing in capabilities to capitalise on the emerging opportunities in the industries of our key customer segments," the company's Chief Financial Officer Savitha Balachandran said in a press release. "Additionally, our disciplined execution led to strong cash conversion in the first half of the year, with free cash flow to net income conversion exceeding 100%. We are committed to delivering long-term value for all our stakeholders," Balachandran said.
Revenue from the services segment, which contributes 78% of the company's operating revenue, rose to INR 10.1 billion, up 2% on quarter. Revenue from the technology solutions segment was INR 2.91 billion, up 2.8% on quarter. In constant currency terms, the technology firm's revenue for the quarter was $154.6 million, up 0.8% on quarter. The services segment reported a revenue of $119.9 million in constant currency terms, up 0.3% on quarter. Other income of the company for the September quarter fell 28.6% sequentially to INR 164 million.
The company's offshore revenue for the quarter was 43.7% of total revenue, up from 39% in the June quarter. Onshore revenue contributed 58% of the company's revenue in the September quarter, down from 61% in the June quarter. Tata Technologies' offshore revenue represents services revenue delivered from India and Romania and sourced outside India and Romania.
The last 12-month attrition rate of the software firm improved 60 basis points to 13.1% in the quarter from 13.7% in the last quarter. The net headcount addition for the quarter was 175, taking the total headcount of the company to 12,680.
The company said it expects to deliver better performance in Oct-Mar than Apr-Sept on the back of a healthy order book and pipeline, along with the continued positive momentum within its anchor accounts.
On Monday, shares of Tata Technologies ended at INR 999.50 on the National Stock Exchange, down 1.2%. The company announced its results post market hours. End
Edited by Manisha Baxla
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