Tata Technologies drops as Q2 PAT slides 5.2% QoQ
Sequentially, net income declined 5.2%, while revenue increased 2.1% during the quarter.
Profit before tax stood at Rs 241.7 crore in Q2 FY27, down 4.0% vs Q1 FY27 and up 7.0% vs Q2 FY26.
Gross profit increased 31.6% YoY to Rs 473.8 crore from Rs 359.9 crore. The gross margin improved to 27.9% from 27.2% in the year-ago quarter.
Operating EBITDA increased 31.5% YoY to Rs 273.3 crore from Rs 207.8 crore. The operating EBITDA margin improved to 16.1% from 15.7% a year earlier.
Revenue from the Services segment increased 33.9% YoY to Rs 1,355.7 crore, while revenue from the Technology Solutions segment rose 10.5% to Rs 343.1 crore. Gross profit from the Services segment grew 34.4% to Rs 408.4 crore, while the Technology Solutions segment reported a 16.6% increase to Rs 65.4 crore.
In USD terms, revenue from operations stood at $177.9 million, up 1.9% QoQ and 22.2% YoY in constant-currency terms. Services segment revenue rose 4.3% QoQ and 26.2% YoY in constant-currency terms to $141.9 million.
The company?s headcount stood at 12,895 in Q2 FY27, compared with 12,402 in Q2 FY26 and 12,579 in Q1 FY27. Voluntary attrition over the trailing 12 months eased to 15.6% from 16.0% in the previous quarter.
Days sales outstanding increased to 102 days from 97 days in Q1 FY27. Cash and cash equivalents stood at $107.8 million, while free cash flow was Rs 223.5 crore.
Warren Harris, chief executive officer and managing director, said revenue grew 28% YoY, supported by demand, ongoing programme ramp-ups and pipeline conversion. He expressed confidence in delivering strong double-digit growth for FY27, citing the company?s capabilities in product realisation, full-vehicle development, aerospace and AI-native transformation.
Chief financial officer Uttam Gujrati said the performance reflected a diversified portfolio, improving deal momentum and disciplined execution. He noted near-term challenges in certain customer segments and geographies but said underlying demand remained encouraging.
A foreign brokerage maintained a Sell rating on Tata Technologies but raised its target price to Rs 560 from Rs 540. It said the company?s Q2 FY27 performance was in line with expectations, with constant-currency revenue growing 1.9% QoQ. The marginal increase in the target price reflects recent deal wins and steady operational execution.
A domestic brokerage maintained a Reduce rating on the stock with a target price of Rs 735. It said key factors to monitor include automotive demand in Germany, performance of the Technology Solutions segment and the margin trajectory. It noted that large deal wins improve growth visibility for the second half of FY27, but this is already reflected in the stock price.
Tata Technologies secured a $138 million full-vehicle development programme with a leading luxury European automotive OEM covering two vehicle platforms. The engagement spans product development, manufacturing engineering, technical leadership and programme management.
The company was also selected by a leading North American commercial vehicle manufacturer to lead the end-to-end development of a new vehicle platform and support its associated digital ecosystem.
In another engagement, a global automotive OEM selected Tata Technologies to support the development and virtual validation of next-generation vehicle software platforms, strengthening its capabilities in software-defined vehicles and embedded engineering.
Additionally, a European Tier 1 supplier appointed Tata Technologies as its strategic digital transformation partner to modernise manufacturing operations across global plants. A North American Tier 1 supplier also selected the company to take responsibility for a strategic engineering centre, reflecting customer confidence in its delivery capabilities.
Tata Technologies is a global product engineering and digital services company helping manufacturers design, develop, and deliver better products. The company partners with global OEMs and enterprises across automotive, aerospace, industrial heavy machinery, and other manufacturing sectors.
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