Warren Harris, who took over the reins of Tata Technologies earlier this month after Patrick McGoldrick stepped down, believes the one big challenge for him will be to maintain growth momentum to reach its target of $1 billion annual revenue by 2017.
Though acquisitions will be a crucial part of this aim, organic growth is important. The company foresees doing two to three acquisitions over the next two to three years. It is comfortable with taking over firms with revenue with annual revenue of $30-60 million.
“I have been part of Tata Technologies and working along with Patrick. In terms of priorities, I think it will be a challenge in maintaining the business plan to reach our target of $1 billion. Organically, we have been doing a great job on the growth front but we will also have inorganic play. It is an important part of our plan,” said Harris.
Three years earlier, the company had chalked out an ambitious plan to be a $1-billion revenue company. In 2013-14, this grew 17 per cent to touch Rs 2,395 crore ($400 million). Cash balances were Rs 968 crore.
“We are comfortable to do an acquisition of the size of Cambric last year. Our focus will be to acquire for capabilities or to get access to marquee customers,” said Harris. The company acquired Cambric in 2013, getting a foothold in Eastern Europe (the latter has an engineering centre in Romania) and access to domain expertise and presence in the industrial equipment sector. Asked if Tata Technologies had been able to work with any original equipment maker for its electric mobility vehicle, eMO, which the company showcased at the North American International Automotive Show in Detriot, he said that was more to showcase their capabilities. “eMO and eMO-C both have received well in the auto sector. We were able to demonstrate a business model in this segment. We also used this as a window to showcase Tata Technologies' capabilities of an end-to-end service provider. Many of the concepts we showcased in eMO have found their way in several of the projects we are working on,” added Harris.
Tata Technologies has a big focus on Asia, Europe and the US. “India is a big focus area for us. It contributes 75 per cent of our Asia-Pacific revenue. India as a market has been a growth story for us. Though the domestic market has been slow, we have seen customers using India as a manufacturing hub for other regions across globe,” he said.
For FY14, the India contribution to revenue was Rs 691 crore. America contributed Rs 735 crore and Europe, largest segment for the company, Rs 951 crore.
When asked how the company intends to leverage the group, especially with Chairman Cyrus Mistry asking group firms to work together, Harris said that the company is already working in the aerospace segment with some of the group firms. “There is already a group initiative. If you take the aerospace sector for instance, and you look at the work done for organisations like Sikorsky and Lockheed with the plans being commissioned in Hyderabad. There’s already been a consolidated approach to those opportunities,” he added.
He also elaborated that the group Chairman has talked about industry clusters and approaching it collectively from the centre. “After which the companies are aligned around and I certainly think you will see more of that in the future," he aded.
Harris also further added that in terms of boundary management, there are something’s that the group can do in the future that will allow group firms to get their collective preposition in a much unified way. “They are very much in thoughts with what the group chairman is trying to do in terms of position and capabilities inside of the group that are complimentary and mitigate some of the overlap that confused some of the outside markets in the past,” he added.