Tata Technologies

Stock Analysis & Valuation
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Tata Tech has announced JV with BMW

What perplexes me is why a company (BMW) which operates in same segment like Tata Motors (parent of tata tech) are joining hands.

Technically the 50 day DMA looks like a resistance for the stock.

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Don’t see any problem with that. If IP violation is an issue, TCS, owned by Tata Sons (which owns Tata Motors and in turn Tata Tech also), serves many automobile customers and so does Tata Elxi, another Tata Sons company. Also tie up with BMW doesn’t stop Tata Tech from signing up with other Auto OEMs who could also be BMW’s competitors.

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Tata Technologies Limited Q4 FY’24 Results Conference Call Transcript May 03, 2024

Automotive Sector

  • We closed a total of 12 large deals in fiscal '24, which included one $50 million plus deal and 5 deals in the $15 million to $25 million range.

  • We signed a strategic agreement with BMW to establish a JV in India that will be focused on developing next-generation automotive software and digital technologies that will further enable BMW to optimize how they manage their global enterprise.

  • Our customer pyramid has continued to improve with 2 customers added in the $10 million to $50 million category, two in the $5 million to $10 million category, and three in the $1 million to $5 million category.

  • Our services business, which formed 77% of our total revenue was flat sequentially, driven by the anticipated ramp-down at VinFast.

  • The rest of our services and businesses continued to show very healthy momentum with industry-leading sequential growth of 10.4% and full-year growth of 30%.

  • Our margin performance has remained resilient with operating EBITDA coming in at 18.4%.

Aerospace Sector

  • Our aerospace vertical continues to scale with opportunities opening up in North America, Europe, and here in India.

  • Whilst demand for high-end embedded and cybersecurity solutions has largely informed the growth that we see in the industrial heavy machinery sector.

  • We had two milestone wins in the quarter, which included the strategic partnership with BMW and a $30 million deal in the Education segment with the government of Telangana to modernize 65 state-owned ITIs.

  • We are currently providing to enable Tata Motors to develop an all-new battery electric vehicle for the Indian market using JLR’s EMA platform.

  • We are making good progress in deploying GenAI solutions for our customers in engineering, manufacturing, and various aspects of the customer experience value chain.

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Disc: invested at current levels