TATATECH Q3 FY26 earnings call.
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Revenue
₹1,366 Cr
verified against source
Revenue YoY
3.2%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Tata Technologies delivered Q3 FY26 revenue of ₹1,366 crore (up 3.2% YoY, 2% QoQ), navigating a traditionally soft quarter impacted by fewer billing days and a month-long cyber security disruption at one of its largest customers. Services revenue grew 4.7% QoQ in constant currency (1% organic), with aerospace and IH verticals delivering 10% sequential USD growth (aerospace +19% QoQ). EBIT margins contracted to 14.1% from 16.4% in Q2 due to annual wage revisions and the temporary revenue headwind—both expected to normalize in Q4. Management guided to sequential revenue growth exceeding 10% in Q4 with margins exceeding Q2 run rate despite new labor code impacts, while targeting double-digit organic growth in FY27. The Eztec acquisition (completed November) is integrating well and already creating joint bidding opportunities, particularly with Volkswagen Group. The BMW JV has scaled to 1,500+ engineers with 37% sequential profit growth, and aerospace is on track to reach ~$40 million in FY26 (doubled for fourth consecutive year).
Colored figures show movement against the previous available record.
Guidance to track
- Management expects strong rebound in Q4 driven by recent deal wins, EZACT contribution, and normalization of customer operations, including catchup from JLR cyber incident disruption.
- Despite impact from new labor codes (one-time ₹140 crore provision in Q3), margins are expected to recover and expand above Q2's 16.4% as wage hike headwinds normalize.
- Management explicitly confirmed the FY27 double-digit growth target is entirely organic, with EZACT contribution addressed separately from this baseline.
- Aerospace business has doubled revenues for four consecutive years from a low base, with strong pipeline visibility and momentum expected to continue.
Risks flagged
- Education business declined 22% QoQ due to temporary softness and slower decision cycles. While management cites a healthy pipeline, recovery timing remains uncertain.
- Analyst questioned whether Q4 growth is heavily dependent on JLR catchup revenue from the cyber incident, which management deflected by emphasizing broad-based growth.
- One-time ₹140 crore provision for employee benefits under new labor codes; ongoing compliance costs not fully quantified, creating uncertainty around sustainable margin trajectory.
- Days sales outstanding increased to 111 days from 109 days, driven by higher DSO in products and education segments. Management expects normalization over 1-2 quarters.
Key quotes
- This is a solid outcome in what is traditionally our softest quarter of the year. What is encouraging is that even with these headwinds, we delivered growth. This speaks to the underlying momentum in the business, the breadth of our client portfolio, and the resilience of our execution engine.
- One of the things that gives us confidence in the momentum behind what I've just cited is that in the third quarter we won the first full vehicle program that we as an organization have won in the last 18 months. And so we believe that that's proof positive that the green shoots are now starting to translate into program awards that are material and will extend over multiple years.
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