With India's foot on EV pedal, Tata Tech expects 35% biz recharge

Tata arm sets target of becoming 'half-a-billion-dollar' firm by end-FY22

Tata Technologies (Tata Tech), the engineering services and product development arm of Tata Group, has said the company is expecting a growth of over 35 per cent in its business in the current financial year (2021-22, or FY22), driven by recovery-driven investments in the automotive sector and companies lining up long-term plans for electric vehicles (EVs) globally.

“We expect a rise of 35 per cent in our business in FY22. There are a number of reasons for this growth, including a drop in demand last year. Our clients are investing in new products and in the digitisation of their enterprise,” said Warren Harris, managing director and chief executive officer of the company.

Owing to the Covid-19 pandemic, the company’s revenue for 2020-21 saw a decline of 16.5 per cent to Rs 2,380.9 crore, compared to the previous financial year. The firm has also set a target of becoming ‘half-a-billion-dollar’ company by the end of this financial year in terms of revenue.

Tata Tech expects the rise in interest in the EV segment by various companies is likely to add to its business portfolio in FY22. The company’s EV modular platform is likely to be the key driver.

According to estimates, a delay in launch may cost an original equipment manufacturer around $1 million per day.

“With the configurable EV platform that we have developed, the time taken for launch can be reduced from six months to two weeks. This will be considerable savings in terms of time and money for an EV manufacturer,” said Harris.

He said although demand is increasing in other segments like industrial machines and aerospace, the automotive segment is seeing rapid investments.

Tata Motors holds around 72 per cent in Tata Tech; Alpha TC Holdings 9 per cent.

Harris said the company is financially healthy, withholding comment on the company's initial public offering plans. “We are debt-free and have $200 million on our balance sheet,” he added.

Prior to the pandemic, Tata Motors was in talks with private equity (PE) major Warburg Pincus LLC for investing around $360 million in Tata Tech. However, the deal was called off due to delay in getting regulatory approvals.

When asked about any existing plans by promoters for roping in PE players, Harris said, “Shareholders are always looking at ways to support the company. Cannot comment on any ongoing discussions. Shareholders will continue to look at their options.”

Pandemic notwithstanding, the company tied up with GKN Automotive - a global leader in driveline systems and advanced ePowertrain technologies - and opened an advanced, global e-mobility software engineering centre in Bengaluru in October 2020. According to reports, the company has plans to ramp up this facility.