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Informist, Thursday, Oct. 16, 2025

By Arya S. Biju

MUMBAI – Tata Technologies Ltd. is expected to report mixed earnings for the September quarter, with its bottom line likely to see a low-single-digit sequential fall despite its revenue rising sequentially at its fastest pace since November 2023, when the company debuted on the stock market. Strong sales in the company's largest segment, services, are expected to drive a recovery in its top line for the quarter after reporting a sequential fall in the last two quarters. The top line growth will, however, be tempered by weak sales in the technology solutions segment.

The company's consolidated net profit for the latest quarter is expected to fall over 4% sequentially but rise nearly 4% on year to INR 1.63 billion, according to the average of estimates from eight brokerages. The highest estimate of INR 1.72 billion for the company's bottom line is from ICICI Securities Ltd. while the lowest estimate of INR 1.46 billion is from JM Financial Institutional Securities Pvt. Ltd. 

The company's consolidated net sales, on the other hand, are expected to rise around 3% on quarter but fall a little over a percent on year to INR 12.78 billion, according to the average of the estimates. The highest estimate for the net sales was from Nirmal Bang Equities Pvt. Ltd. at INR 13.04 billion and the lowest estimate was INR 12.30 billion from Prabhudas Lilladher Pvt. Ltd.

In constant currency terms, the company's net sales for the latest quarter are expected to grow 1.0-1.5%, estimates from four brokerages showed. Prabhudas Lilladher, however, expects the company's revenue in constant currency terms to decline 2.3% on quarter due to continued weak demand in the automotive business and the halt in operations at one its top clients, Jaguar Land Rover, which was caused by a cybersecurity attack in September. 

Most analysts expect sales from the company's services segment to recover in the September quarter after reporting a sequential decline in the trailing quarter. The recovery is expected to be led by traction in the aerospace and industrial heavy machinery segments. During the June quarter, the company's services segment was hit by delays in ramping up of large deals and extended decision-making cycles, its management had said in a call after the June quarter earnings. 

In contrast, sales from the company's technology solutions segment are widely expected to report a sequential decline in the September quarter, dragged down by a decline in sales from the education business, sequentially flat sales in the products business and with no new announcements of industrial training institute projects, analysts said. This decline comes after the company reported a 7.3% sequential rise in sales from the segment in the June quarter, driven by a recovery in the education vertical as previously delayed projects came online, Tata Technologies said. 

The Tata group company's consolidated earnings before interest, taxes, depreciation, and amortisation for the September quarter are expected to fall over 2% on quarter and nearly 17% on year to INR 1.96 billion, the average of estimates from four brokerages showed. 

Analysts are divided on how the company will fare in terms of its earnings before interest and tax margin. While Elara Securities, ICICI Securities, Kotak Securities, Motilal Oswal Financial Services Ltd., and Nirmal Bang expect the company's EBIT margin to improve 40-203 basis points sequentially, Prabhudas Lilladher and JM Financial expect it to decline around 100 bps and 20 bps respectively. These estimates are for the company's EBIT margin excluding any contribution from its joint venture with the BMW group, an analyst said.

 
Kotak Securities expects the company's EBIT margin for the latest quarter to increase 60 bps sequentially due to operating leverage and initiatives to improve efficiency. "EBIT margin is expected to expand by 70 bps to 14.3% as margin contraction in 1Q was owing to operating deleverage due to revenue decline," Nirmal Bang Equities said. However, some analysts expect a weak operational performance and the stoppage of operations at Jaguar Land Rover to hit the company's EBIT margin for the latest quarter.

 
Tata Technologies will announce its September quarter earnings Friday. Investors will watch out for management commentary on resumption of operations at Jaguar Land Rover. Management comments on the timeline for recovery in demand, margin, and client conversation will be key to track, Motilal Oswal said in a note. 

The company's outlook on demand in the automotive, aerospace and manufacturing verticals and updates on the joint venture with the BMW group will also be monitored, according to analysts. Further, the Street will closely monitor updates on new deals, deal pipeline, and management comments on the impact of the recent hike in US H-1B visa fee. 

Of the seven research reports on the company available with Informist, five have a 'sell' or equivalent rating on the stock with an average target price of INR 558. Of the remaining two, one has a 'buy' rating with a target price of INR 800 and the other has a ‘hold' rating with a target price of INR 797. 

Thursday, shares of the company ended slightly lower at INR 692.10 on the National Stock Exchange. The stock has fallen over 3% since the announcement of its June quarter earnings on Jul. 14.

For the June quarter, the company's consolidated net profit had fallen nearly 10% on quarter but had risen a little over 5% on year to INR 1.70 billion, beating analysts' expectation of INR 1.53 billion. Its consolidated revenue for that quarter had fallen over 3% sequentially and nearly 2% on year to INR 12.44 billion, also beating analysts' expectation of INR 12.13 billion. 

The following are the Jul-Sept earnings estimates for Tata Technologies from eight brokerages in descending order of the estimate of net profit in INR million:

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Edited by Vandana Hingorani

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