Tata Technologies' Growth Momentum Intact As Industry Tailwinds Aid, Says CEO Warren Harris

Tata Technologies Ltd. is poised for growth despite headwinds as the demand momentum for the industry is on a positive trend, according to the company's top executive.

The IT-enabled services' company is not seeing any tapering in industry demand, Warren Harris, managing director and chief executive officer, told NDTV Profit. "There has been a slowdown in EV sales, but we are in the business of investing with our customers in future profits and certainly, demand continues to build."

The growth in EV sales has started to plateau, Harris said. The growth is still very much there, despite the headwinds in the US and Europe.

Almost one in five vehicles that are sold today has some form of electrification and by mid 2030s, it will transition to one in two vehicles, Harris said.

"The industry is very much pivoting, not just to electrification, but also investments in software-defined vehicles and in autonomy, and that continues to provide tailwinds to us."

The company is open to both organic growth and targeted acquisitions, the managing director said. "We are primed to be able to pull the trigger and make acquisition when it makes sense...We have a list of targets that we are evaluating and we will act with some conviction as and when we believe the target acquisition will be right for us."

The biggest challenge, currently, is capability and skills, he said. "And that is why we are investing all over the world and especially in India."

Tata Technologies will continue to be very focused upon a small number of very strategic partnership, he said. "The type of proposition that we represent requires a level of customer intimacy that cannot be extended to 100 companies."

Citi Research has maintained a 'sell' rating and revised its target price for Tata Technologies to Rs 945 per share from the earlier Rs 935 apiece. This was done citing changes in exchange rates and some operational parameters.

Tata Tech's stock fell as much as 2.3% during the day before paring losses to trade 1.64% lower at Rs 1,094.4 apiece, compared to a 0.10% decline in the benchmark Nifty 50 as of 10:23 a.m.

It has fallen 16% during the last 12 months and 7.5% year-to-date. The relative strength index was at 61.

Three out of 10 analysts tracking the company have a 'buy' rating on the stock, and seven have a 'hold', according to Bloomberg data. The average of 12-month analysts' consensus price targets implies a potential downside of 14.7%.