/images/ppid_59c68470-image-177796532970210285.webp)
What is the story about?
Shares of Tata Technologies
Ltd. are trading up to 10% higher on Tuesday, May 5, after the company reported a strong March quarter performance and issued an upbeat outlook.
Tata Tech delivered one of the strongest growth prints in the ERD space, with constant currency revenue rising 12.4% sequentially, ahead of Street estimates of around 10%. Organic growth stood at 7.8% quarter-on-quarter, while the rest was driven by the Es-Tec acquisition.
Margins also rebounded, expanding 190 basis points sequentially to 16%.
Management has guided for double-digit organic revenue growth in FY27 and expects EBITDA margins to improve to around 18% by Q4FY27.
It also reiterated its long-term ambition of becoming a $1-billion company in the next couple of years, with operating margins targeted at 20–21%.
According to brokerage firm JPMorgan, the growth guidance appears achievable given a relatively low required quarterly growth rate, and could prove conservative if demand conditions improve.
The brokerage said strong deal momentum, with four large deal wins in Q4, two more in April, and additional deals expected to close over the next 8-12 weeks, providing revenue visibility.
The company also secured its first meaningful engagement in Japan, marking an important geographic expansion.
Management said growth during the quarter was broad-based across automotive, industrial heavy machinery, aerospace and education segments.
It added that recent deal signings over the past three to four months have been the strongest so far, supporting confidence in sustained growth.
On the brokerage front, JPMorgan and BofA Securities maintain 'Neutral' ratings with price targets of ₹560 and ₹595, respectively, while Goldman Sachs has a 'Sell' rating with a target of ₹470, implying a potential downside of 20% from current levels.
Tata Tech delivered one of the strongest growth prints in the ERD space, with constant currency revenue rising 12.4% sequentially, ahead of Street estimates of around 10%. Organic growth stood at 7.8% quarter-on-quarter, while the rest was driven by the Es-Tec acquisition.
Margins also rebounded, expanding 190 basis points sequentially to 16%.
Management has guided for double-digit organic revenue growth in FY27 and expects EBITDA margins to improve to around 18% by Q4FY27.
It also reiterated its long-term ambition of becoming a $1-billion company in the next couple of years, with operating margins targeted at 20–21%.
According to brokerage firm JPMorgan, the growth guidance appears achievable given a relatively low required quarterly growth rate, and could prove conservative if demand conditions improve.
The brokerage said strong deal momentum, with four large deal wins in Q4, two more in April, and additional deals expected to close over the next 8-12 weeks, providing revenue visibility.
The company also secured its first meaningful engagement in Japan, marking an important geographic expansion.
Management said growth during the quarter was broad-based across automotive, industrial heavy machinery, aerospace and education segments.
It added that recent deal signings over the past three to four months have been the strongest so far, supporting confidence in sustained growth.
On the brokerage front, JPMorgan and BofA Securities maintain 'Neutral' ratings with price targets of ₹560 and ₹595, respectively, while Goldman Sachs has a 'Sell' rating with a target of ₹470, implying a potential downside of 20% from current levels.
/images/ppid_59c68470-image-177796259212140354.webp)
/images/ppid_59c68470-image-177796262217175725.webp)
/images/ppid_a911dc6a-image-177783209105293042.webp)
/images/ppid_59c68470-image-177796562794266658.webp)
