Engineering services major Tata Technologies has secured a major contract to design and develop batteries for a global EV battery manufacturer, the company reported today along with its Q1 FY2025 performance numbers. However, while it did not disclose the name of this latest customer it has acquired, Tata Technologies had collaborated with Tata Group’s cell-manufacturing venture – Agratas – earlier this year in January.
Tata Technologies also reported a total operating revenue of Rs 1,269 crore in the last quarter, registering a 0.9 percent year-on-year uptick, albeit de-growing 2.5 percent on a quarter-to-quarter (QoQ) basis. Its services segment revenue, on the other hand, declined 1 percent to Rs 985 crore.
The company’s operating EBITDA stood at Rs 231 crore in Q1 FY25, while its EBITDA margin was pegged at 18.2%, slightly lower than the 18.4% registered in the previous quarter. The net income, at Rs 162 crore, was up 3.1% QoQ.
According to Warren Harris, Chief Executive Officer and Managing Director, Tata Technologies, “The overall market conditions remain favourable as the manufacturing sector continues to future-proof itself through ongoing investments in alternative propulsion systems, software-defined products and services, and smart manufacturing. The VinFast transition is now largely behind us, and we fully expect the sequential revenue growth of our services business to accelerate from the current quarter.”
Tata Technologies has been working on two VinFast EV projects, and at the company’s Q3 FY24 results announcements, Harris had said, “At VinFast, their focus is pivoting from developing new products to building and selling cars. We’ve almost completed the development of the two electric vehicles that were outsourced to Tata Technologies on a turnkey basis, and our activities are now transitioning to launch support. This transition began in the second quarter, accelerated in Q3, and will largely be completed in the current quarter (Q4 FY2024).”
Apart from its recent battery design win, Tata Technologies reveals it has also been selected by a leading commercial vehicle (CV) OEM as their SDV partner for the development of middleware stack. The company says that this strategic engagement will focus on building the foundational elements of the SDV framework, from concept to production.
Tata Technologies has also won an engagement with a leading North American CV manufacturer to develop end-to-end cabin designs and closures. Furthermore, in the aerospace domain, the company has signed a multi-year engagement contract with a European Tier-1 aerospace company to develop business, and first-class aircraft seats.
“Confidence in our full-year prospects is fuelled by our order book, continued positive momentum within our Anchor accounts, and tailwinds that we expect to continue to intersect with across automotive, aerospace, and industrial heavy machinery,” Harris added in a release.
A European luxury automotive OEM has also selected Tata Technologies to develop a cloud-based holistic virtual platform environment for future SoC / MCU hardware architectures. Buoyed by these five strategic wins across the automotive and aerospace domains, Tata Technologies has created a strong value, and registered 70bps sequential improvement in net income margin to 12.8 percent in Q1 FY25.
According to Savitha Balachandran, Chief Financial Officer, Tata Technologies, “Our margins have remained resilient during the quarter, reflecting our strong operating discipline. We are committed to strategically investing in key growth areas while optimising costs and improving efficiency across the organisation. Our robust cash flow management and efficient collections process remain priorities. By focusing on sustainable growth and value creation, we are confident in our ability to stay competitive and achieve long-term success.”
Also read: Tata Technologies wins four global automotive deals in Q3 FY24