Tata Technologies (TATATECH) Q4 20/21 earnings summary

Executive summary

• FY21 revenue fell 16.5% YoY amid COVID-19, but quarterly revenue and operating margins improved each quarter; Q4 revenue reached ₹658.2 crore and operating margin 19.8%.

• Net cash from operations was ₹1,113 crore; best-ever deal signings in H2 and a strong order book supported a cautiously optimistic FY22 outlook.

Financial highlights

• Consolidated revenue was ₹2,380.91 crore vs ₹2,852.05 crore; services revenue declined 18.2% to ₹1,917.74 crore and product revenue fell 8.9% to ₹463.17 crore.

• Consolidated PBT was ₹315.27 crore, down 19.6%; PAT declined 4.9% to ₹239.18 crore, while total income was ₹2,425.74 crore.

• Operating cash flow rose to ₹1,113.20 crore from ₹267.39 crore; cash and cash equivalents ended FY21 at ₹781.33 crore vs ₹376.08 crore.

• Revenue in USD terms was $321.5M, down 20% YoY; sequential revenue recovered from ₹485.4 crore in Q1 to ₹658.2 crore in Q4.

Outlook and guidance

• Management expected sequential quarterly improvement to continue into FY22 and described FY22 as a potential breakout year, citing the strongest-ever order book and H2 deal signings.

• Growth priorities: consolidate automotive and digital offerings; diversify into Heavy Machinery, Aerospace, Industrial and Medical Equipment; monetize Products and Education capabilities.

• FY22 plans included investment in future-ready digital IT and a TTL Technical University to address demand for niche skills.