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Informist, Friday, Apr. 25, 2025

By Avishek Rakshit & Pallavi Singhal

KOLKATA/NEW DELHI – Tata Technologies Ltd. Friday said it expects business momentum to pick up in the next 6-8 weeks once it gets some clarity on the implementation of tariffs announced by the US and the countermeasures by China. The company was seeing a "fair amount of positivity in the US" at the beginning of the current calendar year, but the tariff announcements by the US and the countermeasures declared thereafter have led to delay in clients investing on projects, Managing Director and Chief Executive Officer Warren Harris in a call with analysts after announcing the earnings for the quarter ended March.

"The distraction that organizations like (automaker) Stellantis had, was starting to settle down and we were starting around a renewed commitment to a regional approach to growing their business. That has obviously been shaken by the tariff announcements," Harris said.

The tariff announcement also led to some degree of uncertainty on the impact on the North American Free Trade Agreement, which is a trilateral trade pact between Canada, the US, and Mexico, aimed to eliminate tariffs and trade barriers among these three countries.

"It is not just in the context of the response of markets outside of the United States to the tariffs that have been announced by the US government, but also there's a lot of concern in and around the impact of tariffs across the global supply chains of those organizations," Harris said.

He said the tariff announcements have complicated the situation globally and many of Tata Technologies' customers, who were looking to launch projects and programmes in the Mar-Apr timeframe have delayed the decision making, thus impacting the revenue inflow for the Tata group company.

"I think what everybody's looking for right now is just certainty. And I think if we can achieve that in the next month to six weeks, as the trade negotiations are progressing, then I think that we will see ourselves up for a strong finish to the half year and we'll take momentum into the second half of the year," Harris said.

He said a lot of large deals that the company anticipated would get finalised at the beginning of the calendar year were postposed. "If there's clarity, those deals would get closed," he said.

The impact of tariffs was also felt on Tata Technologies' European operations. Together with the evolving industrial policies in that continent, especially in response to competition from China, led to delays in key investment decisions, Harris said.

"However, we are beginning to see the early signs of foundational investments and the green shoots of improvement. While near-term caution persists, we remain optimistic about medium- to-long-term ER&D (engineering, research, and development) investment in the automotive industry," he said.

Harris said that Tata Technologies was taken by surprise by the magnitude of the tariff announcements. "It wouldn't be too much of a shock if we were surprised again," he warned.

However, in 2024-25 (Apr-Mar), Tata Technologies closed a total of 17 large deals with its customers. These include one deal exceeding $500 million, two deals valued at over $50 million each, and one deal exceeding $20 million in value.

Among the major deals won by the company in FY25, one project with a Tier 1 global automotive supplier involves development of advanced application software designed to optimise energy distribution across multiple battery packs in commercial vehicles. Another major deal struck with an Asian automotive original equipment manufacturer involves design and development of the interior and exterior trims, along with managing a simultaneous engineering project as part of their facelift vehicle program. 

Tata Technologies reported mixed earnings for the March quarter, with its bottom line beating analysts' expectations but top line falling short of expectations. Its consolidated net profit for the quarter grew 12% on quarter to INR 1.89 billion, beating analysts' expectation of INR 1.70 billion. Its consolidated revenue, on the other hand, saw a 2.4% sequential fall to INR 12.86 billion. Analysts had expected the company's consolidated revenue for the quarter to be INR 13.04 billion. On a year-on-year basis, Tata Technologies' bottom line grew over 20%, while its top line saw a marginal fall.

On Friday, shares of the company closed 3.4% lower at INR 693.20 on the National Stock Exchange. End

US$1 = INR 85.45

Edited by Ashish Shirke

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