Why have Tata Technology Shares fallen by 4%?

Tata Technologies is an Indian Multinational  Tata Group Company that provides services in engineering and design, product lifecycle management, manufacturing, product development and IT service management to aerospace original equipment manufacturers. It was recently listed in the Indian markets, The stock of Tata Technologies is down by 4% today amid muted results for Q4 FY 2023-24.

Tata Technologies Q4 FY 2023-24 Results

In its Q4  earnings, The company reported a decline of 28% YoY net profit to Rs.157.2 from Rs.216.5 crores in Q4 FY 2022-23. The revenue from operations declined from Rs.1402.3 crores in Q4 FY 2022-23 to Rs.1301 crores in Q4 FY 2023-24, A decline of 7%.

EBITDA for the quarter stood at Rs.240 crores, While the EBITDA margins during this period stood at 18.4% against 17.3%  in Q4 FY 2022-23. The company also recommended a dividend of Rs.8.40 and a special dividend of Rs.1.65 per equity share.

Company CFO on Results:

Savitha Balchandran, CFO of Tata Technologies said that  They will continue to follow a balanced approach of exercising operational discipline while strategically investing in capacity and capabilities to capture the opportunity presented by the industry’s structural transformation. Ending the year with a robust EBITDA margin of 18.4% and strong liquidity underscores their focus on efficiency and prudent management of resources. She further added” We are excited about our prospects in FY25 and remain committed to creating long-term shareholder value.”

More Pain Expected from VinFast:

Tata Technologies has mentioned that the anticipated ramp-down of VinFast, a key customer, led to a decline in the services revenue during the quarter. It expects to see further run-off from VinFast in the June quarter as well. The services business for Tata Technologies fell by 1% sequentially in constant currency terms. Ex-VinFast, the services business has shown a growth of 10% sequentially. This moderate revenue from a key client has caused concerns among the investors of Tata Technology and the stock is currently trading down by 3.5% at Rs.1045 a piece.

Conclusion: The below expectations result of the company and guidance of further run-off from one of the key customers, VinFest for the June quarter has not pleased the markets. The stock is currently trading down by 3.5% at Rs.1045 a piece. It has made a 52-week high and low of Rs.1400 and Rs.1020 respectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.