Tata Technologies (TATATECH) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 saw 3.2% sequential and 3.7% year-over-year revenue growth, with strong services performance, six strategic deal wins, and successful ES-Tec integration, despite seasonal softness and a temporary cybersecurity disruption at a major client.

• Aerospace and IHM verticals delivered 10% QoQ revenue growth in USD terms; aerospace revenue doubled for four consecutive years, expected to reach $40M in FY26.

• Board approved unaudited results, with statutory auditors issuing an unmodified conclusion; board and leadership changes occurred during the quarter.

Financial highlights

• Q3 consolidated revenue: ₹1,365.73 crore, up 3.2% QoQ and 3.7% YoY; services revenue: ₹1,060.22 crore (78% of total), up 4.7% QoQ and YoY.

• EBITDA margin at 14.1%, down from 16.4% in Q2 due to wage hikes and one-time costs; net income: ₹135 crore (standalone), ₹165.50 crore (consolidated); diluted EPS: ₹3.32.

• Exceptional one-time expenses: ₹163.86 crore (consolidated) for Labour Codes and acquisition costs.

• Net cash position: $58M (down from $123M in Q2); cash and cash equivalents: $129.2M; free cash flow: ₹1,908 million.

• DSO increased to 111 days, mainly due to products and education segments.

Outlook and guidance

• Q4 sequential revenue growth expected to exceed 10%, with EBITDA margins projected above Q2 levels; double-digit organic growth targeted for FY27.

• Aerospace business momentum and strong pipeline visibility expected to continue.

• Company continues to monitor regulatory developments regarding Labour Codes and will adjust accounting as needed.