Tata Technolog. Management Discussions

Economic Review

Global Economic Review

The global economy surpassed expectations in 2023 after a turbulent year. It continues to navigate a dynamic landscape marked by a blend of opportunities and challenges. As per the International Monetary Fund (IMF), global economic growth declined to 3.1% in 2023 from 3.5% in 2022. Despite several major economies demonstrating remarkable resilience, underlying risks and vulnerabilities persist due to simmering geopolitical tensions, the growing intensity and frequency of extreme weather events, volatility in energy and food markets, and higher-for-longer interest rates. Amidst these challenges, there is a silver lining as global inflation continues to recede faster than expected, declining from 8.7% in 2022 to 6.8% in 2023. Core inflation is also on a downward trend.

Several emerging markets and developing economies (EMDEs) have outperformed initial projections in 2023. The US economy has experienced the strongest recovery among major economies and its GDP increased from 1.9% in 2022 to 2.5% in 2023. The European Union (EU) has demonstrated resilience in navigating through unprecedented shocks from the prolonged Russia-Ukraine war and higher interest rates. Although its GDP growth substantially contracted from 3.6% in 2022 to 0.6% in 2023, the EU managed to avoid the recession in 2023.

The IMF estimated a growth rate of 4.7% for Asia in 2023, with China and India playing a major role. In China, higher spending on disaster recovery and resilience initiatives supported growth, while in India, robust domestic demand led to an upward revision in the growth estimate.


The global economy is expected to sustain its resilience in 2024. The IMF forecasts a global growth of 3.1% in 2024, with a slight uptick to 3.2% in 2025. Asia is expected to again contribute significantly to global growth in 2024, echoing its impact in 2023.

Region-wise economic growth (%)

Region 2023 2024 (P) 2025 (E)
Global Economy 3.1 3.1 3.2
Advanced Economies (AEs) 1.6 1.5 1.8
Emerging Markets and Developing Economies (EMDEs) 4.1 4.1 4.2

Global headline inflation is expected to decrease to 5.8% in 2024 and 4.4% in 2025. The global economic outlook for 2024 will be impacted by higher interest rates, carrying the risk of a resurgence in inflation and shifts in the anticipated monetary stance. Furthermore, the ongoing

Russia-Ukraine conflict has the potential to dampen the overall economic outlook of the EU. The escalation of geopolitical conflict in the Middle East and the Red Sea route could elevate logistics costs, energy and commodity prices, raise the risks of supply disruptions, and pose downside risks to the global economy. However, with faster disinflation and steady growth, the possibility of a severe economic downturn has decreased. Positive factors, such as stronger-than-expected economic performance of the US and several large emerging market and developing economies, economic stimulus measures . in China, and the resilience of Europe, are poised to bolster the outlook of the global economy.

Indian Economic Review

Amid the volatile global economic environment, India emerges as a symbol of optimism, maintaining its position as the worlds fifth-largest economy and expected to continue leading as the fastest-growing major economy. As per the Second Advance Estimates of National Income, 2023-24, Indias GDP growth remained strong at 7.6% in FY 2024 as against 7% in FY 2023, supported by buoyant domestic demand, moderate inflation, a stable interest rate environment, and strong foreign exchange reserves. Additionally, a double-digit growth rate of 10.7% in the construction sector and an 8.5% growth rate in the Manufacturing sector have contributed to the GDP growth in FY 2024. The Index of Industrial Production (IIP) shows that the output of Indias industry grew by 6.1% in the first three quarters of FY 2024 compared to 5.5% in the corresponding period of last year.

Indias GDP Growth Rate

CPI inflation is on a downward trajectory and eased to 5.09% in February 2024 from 5.69% in December 2023 and 6.44% in February 2023. Headline inflation is expected to gradually decline to the target although it remains volatile due to repetitive food price shocks. The RBI keeps the policy repo rate unchanged at 6.50% and retains the CPI inflation forecast at 5.4% in FY 2024.


According to the IMF, the Indian economy is anticipated to progress steadily at 6.7% in FY 2024 and 6.5% in FY 2025. However, the RBIs forecast is more optimistic, projecting a higher GDP growth of 7.6% for FY 2024 and 7.0% for FY 2025. Indias economic outlook remains positive, supported by stronger consumer demand, increased capital expenditure, and enhancements in both physical and digital infrastructure. Private and government investments are expected to be the primary drivers of economic growth in 2024, backed by improving prospects of rural consumption due to the easing of inflation, increased spending in an election year, and proactive government policy measures.

The Interim Budget 2024-25 reflects the Governments continued focus on infrastructure development, economic stability, sector-specific developments, environmental sustainability and strategic global positioning. It sets the foundation for the vision of a ‘Viksit Bharat (Developed India) by 2047.

Industry Review

Since the onset of the pandemic in FY21, the world has experienced more profound changes than in the past few decades combined. Technologies have emerged as primary catalysts for transformation within companies. As a global leader in product engineering and digital transformation, your company is equipped to assist manufacturing firms in adapting and flourishing in this new normal. Your company has strategically invested in these domains in response to emerging megatrends such as the adoption of electric vehicles, embedded systems, sustainable engineering solutions, and digital transformation. By developing innovative solutions and accelerators, your company differentiates itself, helping customers create competitive and sustainable products. Your company has collaboratively guided some of the worlds leading OEMs through these shifts, enabling them to excel in the evolving global landscape.

ER&D services are essential for designing and developing products with software, embedded, and mechanical components and cover the complete product and process development lifecycle. Global ER&D spending estimated to have reached $1,811 billion in 2022 and is projected to grow at a 16% CAGR through 2026. This growth is driven by innovation, digital engineering, and investments in IoT, AI, and advanced analytics. Significant contributions come from the manufacturing, automotive, and high-tech verticals, with North America leading in ER&D spending, which is expected to increase from $903 billion in 2022 to $1,459 billion in 2026. APAC, known for its significant contributions across key sectors and as a major market for battery electric vehicles, is projected to grow from $447 billion in 2022 to $616 billion in 2026. European spending is expected to rise from $443 billion in 2022 to $573 billion in 2026. The rise of cloud computing, 5G, AI, and the shift towards remote and hybrid work models have accelerated the demand for skilled talent, shortened product development timelines, and increased reliance on third-party ESPs for competitive differentiation. The automotive ER&D outsourced market, valued between $18 and $20 billion in 2022, is expected to grow faster than the overall ER&D sector, with the share of digital technology anticipated to increase from 26% to 36%. The aerospace and defense ER&D spend is projected to reach $62 billion by 2026, with Europe taking the lead. The IHM sectors ER&D spending is expected to hit $49 billion by 2026, focusing on digital engineering. Sustainability initiatives aiming at carbon net-zero targets are driving ER&D spending towards energy-efficient designs and clean energy transitions, especially through electrification in transport and other sectors. Shrinking innovation cycles demand faster product development, with automakers expected to launch 61 new models annually from 2022 to 2026, a 50% increase over previous decades. The integration of digital technologies such as PLM, ERP, and MES, collectively known as the digital thread, is revolutionizing manufacturing by enabling real-time insights and enhancing factory automation within Industry 4.0 frameworks. This responds to the growing product complexity seen in industries like automotive, where digital and connected services are prioritized, and companies are moving towards models like battery-as-a-service (BaaS) and over-the-air (OTA) updates. Lastly, the advent of generative AI holds promise transform business operations and product development with its potential for efficiency and innovation, marking a significant investment trend in ER&D.

Key product and technology trends influencing the manufacturing industry and its customer preferences are:

1) Software-defined vehicle aligned to ACES: The automotive industry is undergoing a significant transformation with the rise of software-defined vehicles (SDV), which has greatly impacted Engineering Research and Development (ER&D) service providers. These vehicles depend heavily on software for functionalities such as infotainment systems and Advanced Driver-Assistance Systems (ADAS), requiring ER&D firms to play a crucial role in designing, testing, and implementing complex software integrations. This shift enhances vehicle functionality and user experience while emphasizing the importance of continual software updates and robust cybersecurity measures. ER&D providers are now essential in developing and maintaining the digital architecture of modern vehicles, ensuring innovation and security. As vehicles become more software centric, ER&D service providers must evolve their offerings in software development, systems integration, and continuous support to help automotive clients navigate this transition. Additionally, advancements in AI and machine learning are being leveraged to enhance vehicle motion control, and OEMs are focusing on establishing bidirectional communication to enable a variety of connected features.

2) Regulatory Push Towards Cleaner and Greener Products (carbon footprint reduction): There has also been a regulatory push towards cleaner and greener products through electrification and improved fuel efficiency in traditional ICE

(Internal Combustion Engine) vehicles, particularly enforced through the CAFE (Corporate Average Fuel Efficiency) regulations. This set of regulations aims to increase the fuel efficiency of vehicles on the road by 35% by 2030 and imposes economic penalties on manufacturers who do not meet the corporate average targets. Automakers are shifting their focus to lightweighting, which is expected to become a new trend as products are designed to meet the tougher CAFE rules spanning from 2017 to 2025.

3) Advent of Generative AI: GenAI streamlines the product design process, enabling rapid development and exploration of complex designs that were previously limited by manual processes. This technology also enhances the accuracy of simulations and predictive analytics, crucial in industries like automotive and aerospace, leading to better decision-making and reduced reliance on physical prototypes. By facilitating customized engineering solutions that meet specific client demands without significant increases in time or cost, GenAI improves client satisfaction and competitive positioning. Additionally, GenAI

optimizes operational efficiencies by automating routine and complex tasks, such as data analysis and inventory management, freeing up resources for strategic initiatives. Your company is capitalizing on Generative AI (GenAI) to enhance its Engineering Research & Development (ER&D) services, reinforcing its leadership in digital innovation within the engineering sectors.Ultimately, its proactive approach to integrating advanced technologies allows your company to quickly adapt to changing market conditions and maintain a competitive edge in the ER&D sector.

4) Digital Manufacturing: Digital technologies are revolutionizing the global manufacturing sector by enhancing how products are developed, built, and maintained. These technologies facilitate creating, securing organization, and analysing data from various sources. Core components of any manufacturing enterprise, such as Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), and Manufacturing Execution Systems (MES), are foundational to this transformation. However, the sector faces challenges, including poor collaboration due to widely dispersed and complex infrastructures, limited flexibility from reliance on disparate platforms, constrained decision-making from lack of integrated channels, and restricted data visibility due to the absence of centralized monitoring and the high costs of connectivity solutions. These issues underscore the need for real-time manufacturing insights across all stages from design to disposal. In response, many large manufacturing firms are intensifying their focus on factory automation, employing Industry 4.0 technologies to better manage demand fluctuations, adapt management and production processes for remote work, and enhance their environmental sustainability.

Company Overview

Your company (BSE: 544028, NSE: TATATECH) is a global product engineering and digital services company, focused on fulfilling the mission of helping the world drive, fly, build, and farm by enabling customers to realize better products and deliver better experiences. As the strategic engineering partner that businesses turn to, your company enables manufacturing companies to conceptualize, develop, and realize products that are safer, cleaner, and improve the quality of life for all stakeholders, thereby achieving the vision of engineering a better world. Your company offers a full spectrum of solutions across the product value chain, including outsourced product engineering services, digital transformation services, upskilling solutions, and value-added reselling of software products essential for developing and realizing superior products. From delivering discrete outcomes to end-to-end turnkey product development for Electric Vehicles, your company is the partner with the experience and expertise to understand what better looks like and how to bring it to life.

There are two components to your companys value proposition:

• Outsourced product engineering services that help manufacturing customers conceptualize, design, and develop superior products.

• Identifying and deploying technologies and solutions used to manufacture, service, and realize better products, and upskill the workforce with required competencies.

Your companys primary business line includes providing outsourced engineering services and digital transformation services to global manufacturing clients, helping them conceive, design, develop, and deliver superior products, including software-defined vehicles (SDV). Complementing its service offerings, your companys Products and Education offerings (collectively known as Technology Solutions) resell third-party software applications, primarily product lifecycle management (PLM) software and solutions, and provide value-added services such as consulting, implementation, systems integration, and support. Your companys education business offering provides "phygital" education solutions in manufacturing skills, including upskilling and reskilling in relation to the latest engineering and manufacturing technologies, to the public sector, private institutions, and enterprises through curriculum development and competency center offerings via its proprietary iGetIT platform.

Your company is committed to its vision of engineering a better world through collaborative innovation and the adoption of sustainable technologies and processes for customer offerings and its operations. Your companys focus on sustainable engineering solutions, including end-to-end offerings on electric vehicles (EV) and SDV, is enabling OEMs to transform their portfolio and reduce tailpipe emissions, thereby leading to a better environment for everyone. Your companys global presence allows it to capitalize on the investments that companies are likely to make across key regions. The company prioritizes investing in its workforce, focusing on upskilling in new competencies essential for delivering innovative solutions to meet customer expectations. Your company is enhancing its end-to-end product development offerings for electric vehicles (EV) and strengthening its embedded and digital engineering capabilities. Your company continues to optimize its global talent pool, maintaining a cost-effective balance of onshore and offshore resources. This provides OEMs with a valuable, global delivery model that enables intimate client engagement and scalability. Furthermore, with the surge in growth of the Ed-tech sector in the new normal, your company is dedicated to using its expertise in education to assist institutions in training and empowering youth with Industry 4.0 technologies. Your companys commitment to leveraging its iGETIT and Education offerings to train the needy and underserved is aimed at engineering a better world for the youth of tomorrow and addressing industry challenges associated with the availability of skilled manpower.

Your company has over 12,500+ employees serving global customers through 20 global delivery centers spread across Asia-Pacific, Europe, and North America. Your company brings together diverse teams with varying skill sets across geographies and a global mindset to collaborate in real time and solve complex engineering problems. In doing so, your company is redefining what the world understands by engineering and spreading the influence and impact of engineering as humanitys best way of addressing its most important challenges and opportunities. In a world that is becoming increasingly complex, with shortening product innovation timelines and rapid technological change, your companies uniquely balanced on-shore/off-shore global delivery model enables it to provide aligned on-shore customer proximity required to support the iterative nature of product development services, as well as the capacity and cost-effectiveness of off-shore sourcing. The opening of new delivery centers in Germany and France and your companys effective on-shore/off-shore delivery model underscore its commitment to meeting clients dynamic needs across 27 countries, combining local engagement with global efficiency. Meanwhile, your company is expanding into tier 2 cities by opening a new delivery center in Coimbatore, which is focused on SDV and e-Mobility solutions to contribute to the thriving new engineering landscape in the region and control the cost of operations.

Your company has notably enhanced its market standing, a fact underscored by the remarkable success of its Initial Public Offering (IPO). The IPOs shares debuted on the stock market with an extraordinary initial gain of 140% over the bid price, reaching an intraday high of 160% on the day of listing. Over 73.5 lakh total applications, IPO subscription 69.4x, QIBs subscription: 203.4x, At the close of the first day of trading, highest ever listing day gains (all IPOs sized $100mm and above since 2003) and ET Now recognized your companys IPO as the IPO of the year 2023. This splendid performance of IPO was fetched through brand strength and your companys market performance,.

Your company defined a go-to-market strategy, targeting top R&D spenders in pursuit of large-scale deals and deeper engagement with existing accounts. This approach clubbed with the deployment of the "4 in a box" strategy for the meticulous management of key and selected focus accounts. Marketing efforts were also intensified, with a strategic focus on enhancing visibility among select client accounts and their key stakeholders alongside a concerted effort to elevate. These strategic initiatives have resulted in developing inroads into Top R&D spenders marquee accounts and enhanced revenue from our anchor account and other key and focus accounts. Your company has also signed a joint venture with BMW to extend its services for engineering premium products, delivering great digital experiences for their customers and propelling BMWs digital transformation journey in Business IT. Your company is positioned as a leader across social media platforms on a month-on-month basis, as evidenced by its dominant presence in terms of followers and engagement to promote the employer brand. Your company has won the Best B2B Brand - GOLD award and Best Storytelling award at the prestigious ET Brand Equity award in 2023 and many such recognitions at different platforms during the past 2 to 3 years. Your company has further strengthened its approach to innovation. In FY24, your company launched InnoVent, an open Innovation initiative to engage with academia, which attracted top talent from premier institutions nationwide, spotlighting top projects for commercialization and invigorating the innovation ecosystem. Additionally, an internal hackathon has unearthed viable Generative AI solutions to identify promising use cases for implementation. These strategic endeavours have collectively fortified your companys organizational framework, positioning for sustained success and innovation in an evolving business landscape. Your companys Innovation efforts were recognized at the NASSCOM quarterly spotlight award in the Ideation to Engineering Leadership category and NASSCOM Digital Skills award in FY 24, and 2 projects won at Tata InnoVista prefinals in FY 24. Your companys ICE2EV conversion solution was featured in the NASSCOM - Boston Consulting Group (BCG) Seizing the ER&D Advantage Frontiers for 2030 report.

Zinnov, a leading product engineering analyst company, positioned your company as the leader across the Automotive, Electrification, Body Engineering, and Aerospace industry verticals, as well as its Digital Thread capabilities. Your company was also positioned as the No. 1 Automotive ESP in India for the 6th consecutive year, No. 2 in India, and No. 3 globally for EV Capabilities. TechVarsity, a program to develop the capability within your company, has broadened its training programs to include effectiveness assessments, directly contributing to your companys growth by developing the skills in new age technologies such as embedded, digital transformation, a systematic training intervention for GETs before deploying on the live project. To develop future leaders and enhance the capabilities of leaders, programs like LEAP and LeaderBridge have been launched by the companys L&OD team responsible for non-technical training. These efforts have been echoed by customers as part of the NPS survey. "One Team with Customers" is one of your companys core values, and achieving an NPS of 58 in FY24, which is in the top quartile as per industry benchmarks.

Your company is committed to building a sustainable future for mankind, and in that direction, your companys goals and approach are aligned with the Tata Groups Project Aalingana. Your company has also enhanced its community support interventions with the Tree plantation drives, enhancing its employees working for social causes and scaling up the ‘Ready Engineer program to train underprivileged children and help them become employable.

This year, more than ever before, your company will be investing in its people, strengthening learning and development platforms, building next-gen capability such as SDV, Gen AI, etc., and making sure its people stay engaged and trained to deliver its customer projects. Your company will also strengthen its internal systems and processes to support the next phase of growth. The companys service offerings are delivered through two lines of business, leveraging the deep domain knowledge of the manufacturing industry and end-to-end understanding of physical and digital layers of product engineering and seamless integration of digital thread, which is instrumental for its product engineering success. These two LOBs are complemented by your companys offering of Technology Solutions (Education and Software Products)

Engineering, Research & Development (ER&D) services: Today, the manufacturing industry is focused on engineering customer-centric, connected products and building a technology ecosystem to engage service providers better. Your companys ER&D line of business provides global outsourced engineering services that enable manufacturers to conceive, design, develop, and realize more competitive products. Your companys global talent pool of experienced engineers, technicians, project managers, and domain specialists provides efficient and cost-effective product development, from fully outsourced program management to transactional engineering support tailored to clients needs. Your company offers its customers global engineering programs and expert domain services throughout the whole product lifecycle, including shared services, component, subsystem and system delivery, full vehicle turnkey projects and software-defined vehicles. ER&D team is focused on developing and taking clients the capabilities in eVMP 2.0, which include the fully developed model of EV platforms, which include the electrifications such as battery management system, AD-DC converter, and Software-defined vehicles, etc.

Digital Enterprise Solutions (DES): Todays global digital economy is defined by continuous change and progress. To keep up and manage technology-driven change and evolving business transformation roadmaps, manufacturers need a partner who understands the latest innovation and how to implement change successfully. Your company uses its deep domain knowledge of product and manufacturing engineering processes and partnerships with emerging technology providers to deliver digital transformation for customers. Your companys Digital Enterprise Solutions (DES) cover digital manufacturing, data analytics, predictive maintenance, artificial intelligence, and machine learning as your company help its customers move toward Industry 4.0. With your companys help, manufacturers implement, embed and integrate efficient digital strategies across product design, development, manufacturing and aftersales to realize better products, gain a competitive advantage and accelerate their digital revolution.

Education: As manufacturers seek to accelerate toward Industry 4.0, they need engineers who can engineer products of the future and deliver effective digital transformation. To equip the next generation of talent with the required skills, businesses need a partner that offers the relevant training, resources and support. Your company have developed upskilling tools, training and courses that leverage its manufacturing domain knowledge and bridge the gap between industry and academia. Your company works with colleges, universities, and governments to equip the next generation of engineers and technicians with the skills required by the global manufacturing industry. Your company also offer a digital learning system through its proprietary iGET IT offering to corporations and individuals to address their training requirements.

Software Products: Today, the manufacturing industry is focused on engineering customer-centric, connected products with minimum time to market and low product development costs. Your company has collaborated with leading product software providers for value-added software reselling across the product lifecycle. This includes software products that enable digital engineering and manufacturing, helping customers devise a software-enabled strategy to improve processes to conceptualize, design, develop, and manage profitable products. As a product design and manufacturing value-added service provider, your company, from product development CAD, CAM, product lifecycle management (PLM) and simulation to manufacturing process management, improves customer experience with its best-in-class enhanced technical support and training tailored to customers needs.

Business Outlook

Tata Technologies monitors industry and market trends and listening to customers closely. In Automotive, the transition to SDV and electrification trend is already well established and the Company is scaling its existing offerings and accelerators such as eVMP. In Aerospace, the three areas of lightweighting, tooling, and avionics are expected to drive growth and the Company aspires to cement its leadership through these levers. In Industrial, the three areas of IIoT, Digital Engineering, and Smart Manufacturing are being considered while expanding capabilities. Within IHM, electrification, digitization of practices and processes, and automation-robotics are becoming increasingly important. The Company is augmenting its current offerings and creating new offerings to match its capabilities with industry trends.

Tata Technologies believes that it is appropriately poised to effectively utilize the opportunity afforded by the business and technology outlook across all target verticals, such as Automotive, IHM and Aerospace. The Company aspires to shift its business mix over the next two years towards software while keeping its mechanical engagements and credibility intact. The Company is actively pivoting towards a more software-focused core and consciously developing a pipeline across Software Defined Vehicles (SDV), Cybersecurity, Infotainment, and other domains within Digital Engineering. It has established collaborations with industry-leading organizations such as Arm to enhance offerings and establish joint

Go-To-Markets. The recently announced JV with BMW Group is focused on Automotive S/W and Digital / IT transformations. The Company expects to capture client mindshare and establish value propositions through an increased presence in marquee events, as is evident from the Companys presence in both CES in Las Vegas, USA and ELIV in Bonn, Germany during 2023. In Aerospace, the Companys relationship with Airbus has allowed it to scale its capabilities.

Strengthening and leveraging Tata Group synergies is another important track within the Companys business outlook. For example, the JLR-TML-Tata Technologies joint approach towards Sanand Manufacturing Plant#2. Additionally, the Agratas-Tata Technologies collaboration will enable Tata Technologies to develop digital business architectures to support the production of advanced battery solutions at Agratas gigafactories in India and the UK.

Tata Technologies is recognized as a global engineering and digital powerhouse across all verticals and is more confident of C-suite access. The Company will build on its strengths in the new fiscal year.


In FY 2023-24, Tata Technologies took a significant step towards bolstering its capabilities in the automotive software domain through a strategic joint venture (JV) with the BMW Group. This collaboration leverages the complementary strengths of both parties. The Company brings its established expertise in product engineering and digital services, while the BMW Group contributes its knowledge and experience in developing cutting-edge automotive technologies.

The JV, focuses on two key areas: automotive software development and business IT solutions. On the automotive side, the JV will co-develop software solutions for automated driving, infotainment systems, and digital services within BMW vehicles. This aligns perfectly with Tata Technologies commitment to staying at the forefront of the automotive software revolution. In the business IT domain, the JV will target digitalization and automation solutions for product development, production processes, and sales functions within the BMW Group. This collaborative effort is expected to yield significant benefits for both companies, enhancing their overall efficiency and competitiveness in the global automotive market. This JV represents a significant step toward advancing automotive technology and underscores the importance of cross-industry collaboration in shaping the future of mobility.



1) Shrinking Innovation Cycles: The trend of shrinking innovation cycles, especially noticeable in the automotive industry where automakers are projected to launch an average of 61 new models annually between 2022 and 2026, offers substantial opportunities for your company. This increase in model launches, representing a 50% rise from previous decades, responds to rising consumer demand for the latest technologies and features. Your company can leverage this acceleration by offering enhanced engineering and design services to shorten development times, utilizing digital solutions like simulation and digital twins to streamline production, and advising on sustainability to incorporate eco-friendly practices. Customization to meet specific consumer demands can further differentiate your services. Moreover, your company can expand its aftermarket services to accommodate the frequent updates and maintenance that a rapidly evolving market demands, thus enhancing customer satisfaction and loyalty. This strategic alignment with the automotive industrys rapid innovation cycles positions your company to strengthen its market presence and drive business growth.

2) Growing product complexity: The trend of growing product complexity, particularly notable in the automotive industry, where digital technologies are integrated throughout the entire value chain, offers significant opportunities for your company. This complexity, driven by technological advancements and changing consumer behaviours, necessitates sophisticated engineering solutions and services from concept to aftermarket support. As automakers expand their features to include offerings like battery-as-a-service (BaaS) and over-the-air updates to meet consumer demands for greater connectivity and convenience, your company can capitalize on its expertise in digital integration and service innovation. By delivering advanced engineering solutions, digital modelling, and support systems that manage the lifecycle of increasingly complex products, your company can effectively assist automakers in navigating this digital transformation. This capability positions your company as a crucial partner in the automotive sectors ongoing evolution, helping to streamline operations and innovate product offerings in response to the complexities of modern vehicle technologies.

3) Growing demand for Education Technology solutions in India: The growing demand for Education Technology solutions in India presents a significant opportunity for your company, particularly in the context of Industry 4.0. A 2021 World Economic Forum survey revealed that 92% of companies want to reskill their workforce, and according to NASSCOM and Draup, up to 1.9 million engineers need upskilling by 2026. Your company can play a crucial role in addressing this substantial skill gap. Despite Indias strong talent base, there remains a significant need for skill development in engineering and technology. This is crucial for supporting Indias tech industry and could potentially boost the economy by up to 46,795 billion rupees while creating up to 2.5 million jobs by 2030. With your companys expertise in advanced engineering and digital solutions, there is a ripe opportunity to develop and provide educational technology solutions that deliver the necessary training and upskilling, capitalizing on this trend and meeting a critical market need.


1) Client Concentration: Client concentration in the automotive sector represents a significant threat to your company. The automotive industry, which generates a major portion of your revenues, is inherently cyclical and sensitive to macroeconomic and geopolitical shifts. Factors such as economic downturns, changes in consumer demand, and fluctuations in key economic indicators like growth rates, interest rates, and inflation can severely impact the industry. This concentration exposes your company to industry-specific downturns and the risks associated with failing to adapt to rapid technological changes within the automotive sector, such as advancements in autonomous driving and new energy technologies. Additionally, global trade, tariffs, and economic policies play a crucial role. Protectionist measures or shifts in trade agreements in countries where your clients are based can further complicate the operating environment, potentially restricting your companys ability to operate globally and competitively.

2) Credit risk with new OEMs (Startups): Your company is currently engaged with emerging OEMs that present innovative challenges to established players but lack comprehensive knowledge of the product development value chain and domain expertise. This gap can lead to uncertainties regarding their funding strategies, future product roadmaps, and potential changes in ownership, thereby exposing your company to credit risk. To address this, your company has strengthened due diligence and credit review processes for all new customers before formalizing contracts and has included robust commercial constructs while engaging with such customers.

3) Protectionism and regulatory changes could raise costs and squeeze margins: The rise of protectionist policies in several developed economies, coupled with changes in immigration laws and local regulations, may pose challenges in workforce mobilization and lead to higher employee and operational costs. Such shifts could consequently affect financial margins by increasing overhead and complicating the process of deploying talent across borders. This scenario necessitates a strategic review and possible adjustment of operations to manage these increased costs and maintain profitability amidst changing global regulatory environments.

4) Data Security / DLP / Cyber-attack Security: Your company relies on information technology networks and systems to securely process, transmit, and store electronic information and facilitate communication among global locations and with employees, clients, alliance partners, and vendors. Due to the heightened risks of system breaches, hacking, and data leakages in globally connected business operations, stringent data privacy laws have been enacted across various territories. These developments could significantly affect IT infrastructure. Your company is strengthening its data security, implementing data loss prevention (DLP) measures, and enhancing its defense against cyber-attacks.

5) Exchange rate fluctuations: The ongoing process of globalization and heightened currency volatility mean that exchange rate fluctuations significantly influence your companys operations and profitability. Unfavourable shifts in foreign currency exchange rates have previously impacted your companys financial performance negatively and could pose further material risks to operational results in the future. To mitigate these risks, your company has actively employed currency hedging strategies to complement the natural hedge it derives from its operations. While these strategies offer some protection, they may not completely shield your company from the potential adverse effects of currency fluctuations, underscoring the need for continuous refinement and adjustment of financial risk management practices.

Risk Management

The Company has a robust Enterprise Risk Management (ERM) framework for the timely and effective identification, assessment, management, and mitigation of key business and operational risks. The risk management framework also includes evaluation of key business processes and review of operational and compliance controls. The key risks and their corresponding mitigation measures are mentioned below:

Concentration Risk

The cyclical nature of the automotive sector, economic slowdown, lower-than-expected demand, or other factors influencing this sector may adversely affect the Companys business, financial condition, and growth plans. Further, the Company is susceptible to shifts in laws and policies in countries where its automotive clients operate. If these countries withdraw from trade agreements, adopt protectionist measures, or undermine free trade, it could significantly impact the Companys ability to conduct business globally. The Companys material exposure to its anchor clients, primarily in the automotive sector may impact its revenues and profitability, Moreover, the Companys material exposure to Anchor clients, primarily in the automotive sector, may impact its performance Should these clients experience a significant reduction in their engineering and digital Spends


The Company is dedicated to innovating and developing pertinent skills and capabilities to stay abreast of the rapid technological advancements in the automotive sector. It addresses concentration risk by enhancing its relationships with existing clients, selectively targeting new large ER&D spenders, and broadening its client base in the education sector and other sectors.

Regulatory Risk

The Company operates in a highly regulated industry and is subject to laws and regulations in the countries where it operates including the United States and the UK. These regulations encompass export restrictions, economic sanctions, the Foreign Corrupt Practices Act, and similar anti-bribery laws. Any violations of these laws, regulations, and procedures would adversely affect the Companys business, reputation, and market share.


The Company closely monitors the regulatory requirements and their implications for business operations. It strictly adheres to the regulations and implements formal controls and procedures to ensure that it complies with the Foreign Corrupt Practices Act (FCPA), Office of Foreign Assets Control (OFAC) sanctions, and similar sanctions, laws, and regulations.

Operational Risk

The Companys business relies on third-party service providers and key vendors, including software vendors, sub-contracted engineers, and software maintenance providers. Any disruptions from such third-party vendors or sub-contractors, or their inability to fulfill service obligations could negatively impact the Companys business, financial condition, and reputation.


The Company maintains long-standing relationships with third-party software vendor partners and sub-contractors to ensure operational stability. Tata Technologies plays a pivotal role as an important sales channel for these third-party software vendor partners.

Competition Risk

The global ER&D industry is highly competitive. The Company faces competition from major ER&D consulting and technology firms, divisions of large multinational IT corporations, in-house ER&D departments of pure- play technologies firms, as well as local small companies in various geographic markets.


The Companys comprehensive portfolio of services for the automotive industry, coupled with robust digital capabilities enhanced by proprietary accelerators provide it with a strategic competitive advantage. Its extensive global presence, with a well-distributed talent pool, profound domain expertise, scale capacity, ability for turnkey project execution, and longstanding client relationships differentiate it from competitors and empower it to successfully compete in the ER&D industry.

Cybersecurity Risk

The evolving nature of cyber threats presents an ongoing risk that could result in failures or disruption of systems and operations, which may damage the Companys reputation and business. Additionally, the expanding landscape of data privacy laws worldwide poses risks of penalties for non-compliance and reputational harm.


The Company prioritizes safeguarding its systems and products against cybersecurity risks. To protect its IT environment against cybersecurity threats, the Company has implemented a layered security model covering protection at the perimeter network, local area network (LAN) segment, endpoint and application layers. Robust process and technological controls, including next-generation advanced firewalls with intrusion detection systems (IDS)/intrusion prevention systems (IPS), endpoint detection and response solutions, and web application firewalls are in place to ensure the security of its enterprise environment.

Exchange Rate Risk

The Company is exposed to foreign exchange fluctuation considering the countries in which it operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. Unfavorable fluctuations in exchange rates may impact the Companys margins and profitability.


The Company closely monitors currency exchange rate movements and utilizes foreign exchange and other derivative instruments, primarily to hedge foreign exchange exposure to minimize the impact of adverse currency fluctuations. Currently, its foreign exchange transaction risk is generally limited due to the natural hedge provided by onshore revenue and expenses.

Human Resource Risk

The Companys success largely depends on the strength of its skilled engineering professionals and management team. Shortage of skilled workforce, high attrition rates, underutilization of personnel, or lack of the right skills may disrupt the Companys operations, productivity, and growth prospects. Additionally, escalations in wages and other employee benefit expenses may hinder the Company from sustaining its competitive advantage.


The Company undertakes numerous initiatives to attract and retain its talented workforce and improve employee engagement. It has conducive people-centric policies to promote meritocracy across all hierarchies. The Company ensures the availability of the right skills in the right quantity through capability development and capacity augmentation activities. Its ability to manage employee benefit expenses is significantly influenced by its onshore and offshore resource mix, overall resource utilization, and management of the resource pyramid. A higher proportion of offshore resources and improved utilization in fixed-bid projects reduce employee costs.

Financial Overview

Financial Highlights FY 2023-24

The discussions in this section relate to the consolidated financial statements pertaining to the year that ended on March 31, 2024. The Consolidated financial statements of Tata Technologies Limited are prepared in accordance with the Indian Accounting Standards (referred to as ‘Ind AS) prescribed under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the consolidated financial statements.

FY 2023-24 marked a period of significant growth and transformation for Tata Technologies, as the company navigated through dynamic market conditions and emerging opportunities. Despite challenges, Tata Technologies demonstrated resilience and agility, achieving notable milestones in revenue growth, operational efficiency, and strategic expansion.

The following table gives an overview of the consolidated financial results of the Company:

Particulars FY 2023-24 FY 2022-23
Revenue from Operations 5,117.20 4,414.18
Earnings before interest, tax, depreciation and amortization 941.28 820.94
(EBITDA) (before other income)
Profit Before Tax (PBT) 932.05 796.15
Tax Expenses 252.68 172.12
Profit After Tax (PAT) 679.37 624.03

Revenue from Operations

The companys revenue from operations increased by 15.9% to 5,117.20 crore for FY 2023-24 from 4,414.18 crore for FY 2022-23, due to an increase in revenue across all major markets, and across both the Companys segments of Services and Technology solutions.

Geographical Revenue

Tata Technologies has a diversified global client base. The table below presents the Companys revenue from operations from clients in India, UK, North America, Rest of Euorpe and the rest of the World for the year.

Geographical Revenue FY 2023-24 FY 2022-23
India 36.0% 29.8%
UK 24.2% 19.7%
North America 20.4% 21.4%
Rest of Europe 5.0% 3.1%
Rest of the World 14.5% 26.0%
Revenue from Operations 100% 100%

Segment Performance: Tata Technologies witnessed a robust increase in revenue from operations, which surged by 15.9% to reach 5,117.20 crore in FY 2023-24, crossing 5,000 crore revenue for the first time. This remarkable growth was fuelled by an uptick in revenue from operations across both the segments. Notably, revenue from the Services segment accounted for 77.8% of the total revenue, while the Technology Solutions segment contributed 22.2% in FY 2023-24. The companys diversified global client base and strategic focus on innovation played a pivotal role in driving revenue growth.

A summary of revenue from the Companys Services and Technology Solutions segments are depicted below:

Services Segment: The Services business primarily comprises Engineering & Design Services and Digital enterprise services to automotive and non-automotive customers across geographies. During the year, the Company completed the development of the two electric vehicles for a SEA based automotive OEM and its activities are now transitioning to launch support. The company continued to win new business with its Anchor accounts and non-Anchor accounts fuelling growth. The Companys revenue attributable to the Services segment increased by 12.8% to 3,982.61 crore for FY 2023-24, from 3,531.16 crore for FY 2022-23 and Segment margin for FY 2023-24 stood at 31.5% vs 30.7% for FY 2022-23.

Technology Solutions: The Technology Solutions business comprises revenue from academia upskilling and reskilling solutions and value-added reselling of software applications and solutions. During the year, the company signed large contracts with various state Governments in India, leading to robust growth in the year. The Companys revenue attributable to the Technology Solutions segment increased by 28.5% to 1,134.59 crore for FY 2023-24, from 883.02 crore for FY 2022-23 and Segment margin for FY 2023-24 stood at 17.5% vs 19.9% for FY 2022-23.

Expense Management: Amidst a dynamic operating environment, Tata Technologies managed its expenses effectively, enabling sustainable growth and profitability. The company focused on optimizing operational costs while investing in strategic initiatives to drive long-term value creation. Despite challenges, Tata Technologies demonstrated disciplined expense management practices, which contributed to the overall financial resilience of the organization.

Tax expenses: Our tax expenses increased by 46.80% to 252.68 crore for FY 2023-24 from 172.12 crore for FY 2022-23, primarily due to increases in profits in various jurisdictions. The effective tax rate has increased from 21.6% for the FY 2022-23 to 27.1% for FY 2023-24. This is mainly due to the increase in the tax rate in the UK from 19% for FY 2022-23 to 25% for FY 2023-24 coupled with one-time impact of deferred tax charge in India due to the transition to the new tax regime in the current year.

Profit for the year

The Company delivered strong profitability metrics, reflecting the companys robust performance. The companys profit for the year increased by 8.9% to 679.37 crore for FY 2023-24 from 624.03 crore for FY 2022-23.


The Company maintains a strong liquidity position, primarily relying on cash generated from operating activities to fulfil its working capital and capital expenditure requirements. As of March 31, 2024, the company remains debt-free, with adequate cash reserves and other liquid assets to meet its short-term obligations and fund future growth initiatives. Tata Technologies demonstrates effective working capital management practices, with a focus on optimizing credit terms, timely invoicing, and efficient collection from customers. The companys billed days sales outstanding (DSO) of 69 days and unbilled DSO of 14 days reflect its commitment to maintaining a healthy cash conversion cycle and minimizing the risk of overdue receivables. By closely monitoring and managing its working capital components, Tata Technologies ensures adequate liquidity to sustain its operations and drive growth.

Key Financial Ratios

Particulars Unit FY 2023-24 FY 2022-23
Employee benefit expenses /Revenue from operations % 46.2 43.7
Total Expenses (excluding interest & depreciation) / Revenue from operations % 81.6 81.4
EBITDA (Before Other Income) / Revenue from operations % 18.4 18.6
Effective Tax Rate Tax expenses /Profit Before Tax % 27.1 21.6
Profit for the year / Revenue from operations % 13.3 14.1
Days Sales Outstanding (DSO) Days 83 87
Current Ratio Times 1.87 1.92
Debt (excluding lease liabilities) Equity Ratio Times - -
Return on Net Worth (%) % 21.9 23.7
Earnings Per Share (EPS) - Basic 16.75 15.38
Dividend Per Share 10.05 * 12.30

*Proposed final dividend of 8.40 per share and special dividend of 1.65 per share subject to approval by the shareholders in the AGM

In conclusion, FY 2023-24 was a transformative year for Tata Technologies, characterized by sustained growth, operational resilience, and strategic advancements. As the company continues its journey of innovation and expansion, Tata Technologies remains committed to delivering value to its stakeholders and driving sustainable growth in the global marketplace. With a strong foundation and a forward-looking approach, Tata Technologies is well-positioned to navigate through challenges and capitalize on opportunities, reaffirming its status as a leader in India-based automotive ER&D service providers.

Human Resources

The Company considers its employees as the most important asset and integral to its growth and continued success. Over the past years, the Company has increased its focus on its employee engagement and developement, launching various new initiatives with the goal of attracting, engaging, retaining, and fostering key talent and diversity across the organization.

The Company has increased its investments in learning and skill development initiatives, exemplified by its global in-house technical training program, ‘TechVarsity, dedicated to training and mentoring graduate hires in India. Additionally, the Company also conducts training programs in cloud skilling, cybersecurity, and analytics (artificial intelligence and data science), aimed at upskilling its workforce to achieve its business goals. It remains committed to cultivating a future-ready workforce. It continues to nurture a culture that values meritocracy and motivates employees, placing significant emphasis on maintaining high levels of employee engagement, consistent performance, and fostering an innovative mindset to minimize attrition. The Companys initiatives aimed at enhancing employee engagement have led to a consistent decrease in attrition rates.

Region FY 2024 FY 2023 FY 2022
Employee Headcount 12,688 11,616 9,338
Global Attrition Rate 14.5% 21.7% 25.1%

Corporate Social Responsibility

The Companys CSR vision is aimed at co-creating sustainable value for its key stakeholders through technological innovations. By employing innovative product design and embracing advanced digital transformation technologies, it endeavors to contribute to a greener and more sustainable planet and fulfill the expectations of its stakeholders, including customers and communities. Its mission is to make a positive impact on the communities, in which it operates, addressing pertinent needs and concerns and benefiting both internal and external stakeholders. By delivering sustainable solutions, the Company aims to uplift the welfare of communities and preserve the health of the planet.

For CSR Programs, the shareholders are advised to refer to Boards Report, "Corporate Social Responsibility" Section.

Internal Control Systems and their Adequacy

The Company has a robust internal control mechanism in place commensurate with the size and nature of its business. The internal control systems comprising policies and procedures are designed to ensure that operations are efficiently managed and aligned with the strategic objectives of the Company and address various aspects of governance, compliance, audit, control, and reporting. The internal controls are responsible for complying with the regulatory requirements, preventing fraud and errors, safeguarding the Companys assets and finances, and preserving the accuracy and reliability of financial transactions and reporting.

The Companys internal audit committee periodically reviews the adequacy of the internal control systems. Key observations and recommendations are communicated to the management, who takes appropriate corrective measures as deemed fit to maintain the efficiency and effectiveness of the internal controls.

Cautionary Statement

The Management Discussion and Analysis may contain some statements describing the Companys objectives, plans, projections, estimates, and expectations which may be ‘forward-looking statements within the meaning of applicable securities laws and regulations and are based on informed judgments and estimates. Actual results may differ materially from those expressed or implied due to external and internal factors beyond the Companys control. The Company does not undertake any obligation to publicly amend, modify, or revise these forward-looking statements based on subsequent developments, information, or events.