Tata Tech Delivers Strong Q3, Net Profit Jumps, Margins Shine

29 Jan 2024 , 03:29 PM

Design and technology services firm Tata Technologies Ltd reported a robust financial performance for the third quarter ending December 31, 2023. The company revealed a quarter-on-quarter (QoQ) increase in net profit by 14.7%, reaching ₹170.2 Crore, compared to ₹160.4 Crore in the second quarter of FY24.

Total revenue for the third quarter stood at ₹1,289.5 Crore, exhibiting a 1.6% increase from ₹1,269.2 Crore in the preceding September quarter. At the operating level, earnings before interest and taxes (EBIT) saw a significant rise of 11.3% to ₹209.5 Crore in the third quarter, compared to ₹188.2 Crore in the second quarter. The EBIT margin also increased to 16.3% in the reporting quarter from 14.8% in the September quarter.

Tata Technologies’ total operating revenue demonstrated a 14.7% year-on-year (YoY) increase and a 1.6% QoQ uptick, reaching ₹1,289.5 Crore. In USD terms, total operating revenues experienced a 0.9% QoQ increase and a substantial 13.4% YoY surge, totaling ₹15.48 Crore, with services segment revenues contributing significantly at ₹12.02 Crore, marking an 8.3% YoY increase.

The services revenues displayed 5.8% YoY growth in constant currency. The company now boasts 39 customers in the Million-dollar-plus revenue category, compared to 34 at the end of Q3 of FY23.

The operating EBITDA stood at ₹236.6 Crore, reflecting an operating EBITDA margin of 18.3%, indicating a noteworthy 140-basis points increase QoQ, primarily driven by enhanced services gross margins. The net income reached ₹170.2 Crore, resulting in a net margin of 13.2%.

Tata Technologies recorded a net headcount addition of 172 employees, contributing to a robust workforce strength of 12,623. Additionally, the company achieved a commendable 180-basis points sequential improvement in the last 12 months (LTM) attrition rate, now standing at 15.4%.

Warren Harris, Chief Executive Officer, and Managing Director, expressed, ‘We delivered sequential growth and a healthy operating EBITDA margin at 18.3% in Q3FY24 while making strategic investments in relationships to enable future growth. Our deal win momentum has stayed robust, with five large deals won in the quarter, including one deal with over $50 Million in TCV and another one with $25 Million in TCV.’

The financial results were announced after market hours on Thrusday, and Tata Technologies Ltd shares closed at ₹1,144.20, up by ₹1.25, or 0.11%, on the BSE.