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 segment performance and six strategic deal wins across automotive, industrial, and education sectors.

• Integration of ES-Tec acquisition is progressing well, contributing to diversification, joint opportunities, and strengthening embedded/software-defined vehicle engineering.

• Aerospace and IHM verticals delivered 10% QoQ revenue growth in USD, with aerospace alone up 19% QoQ, driven by demand in predictive maintenance, digital transformation, and MRO.

• Products business grew 30% sequentially, while education declined 22% due to temporary demand softness.

• Board changes included the appointment of a new Non-Executive Director and resignations of a Director and the Company Secretary.

Financial highlights

• Consolidated revenue from operations for the quarter was ₹1,365.73 crore, with total income at ₹1,397.55 crore; services segment revenue at ₹1,060.22 crore (78% of total), up 4.7% QoQ.

• EBITDA margin at 14.1%, down from 16.4% in Q2 due to wage hikes and temporary client impact; EBIT margin at 12.6%; net income at ₹135 crore (consolidated net profit ₹165.50 crore).

• Diluted EPS was ₹3.32, down 18.4% QoQ and 19.9% YoY; consolidated basic EPS for the quarter: ₹4.08.

• Exceptional item of ₹163.86 crore (consolidated) due to statutory impact of new Labour Codes.

• Net cash position at $58 million, down from $123 million in Q2; cash and cash equivalents at $129.2 million.

Outlook and guidance

• Q4 sequential revenue growth expected to exceed 10%, with EBITDA margins projected to surpass Q2 run rate.

• Double-digit organic growth targeted for FY 2027, supported by a robust pipeline and improved customer decision cycles.

• Aerospace business expected to reach nearly $40 million in FY26, with continued strong momentum.

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