Tata Technologies Q1 Results Review - VinFast Ramp-Down Dents Growth: ICICI Securities

ICICI Securities Report

Tata Technologies Ltd. reported weak operating performance with a miss on both revenue and operating margins. USD revenue declined 2.9% QoQ versus our expectation of 0.4% QoQ growth.

A combination of the VinFast engagement ramp-down and challenges in select large projects led to the revenue miss. Ebitda margin was resilient despite the revenue dip, albeit short of our estimate.

Management indicated that the VinFast transition is now behind and the company shall resume sequential revenue growth Q2 FY25 onwards.

We trim our FY25E/26E/27E earnings by 5%/3%/3% and revise our target price to Rs 1,290; target price/earning unchanged at 56 times. We see the VinFast challenge as transient and evanescent. Reiterate Buy, given-

1. opportune positioning in automotive engineering and R&D; and

2. growth visibility in anchor clients.

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