On Jan 21, Tata Technologies of India reported a third-quarter profit that exceeded expectations, driven by increased demand in its services and technology sectors. The company offers engineering and technology services to the automotive, aerospace, and heavy machinery industries.
In the October-December quarter, the consolidated profit after tax slightly declined to 1.69 billion rupees ($19.52 million) compared to 1.70 billion rupees a year prior. Market analysts had anticipated a profit of 1.61 billion rupees based on LSEG data.
The majority of revenue, over 78%, comes from the services segment, which saw a 1% growth, while the technology solutions segment, although smaller, increased by 6%.
Engineering, research, and design (ER&D) services, a significant part of India's $254 billion technology sector, offer technology support to sectors like transportation and communications, contributing a sixth of the revenue.
Tata Technologies, along with Tata Elxsi, are positioned to benefit from the ER&D sector, projected to reach up to $170 billion between 2023 and 2030, according to India's National Association of Software and Service Companies.
In the third quarter, Tata Technologies' revenue climbed 2% to 13.17 billion rupees, slightly exceeding the analysts' estimate of 13.11 billion rupees. Nonetheless, total expenses rose by 7% due to increased investment in technology upgrades.
The company's shares concluded the day 0.5% higher prior to the results announcement. ( $1 = 86.5810 Indian rupees)