• Services growth: Services grew sequentially by 4.5% and year-on-year by over 30% in Indian rupees. Management attributed momentum to demand and disciplined execution.
• Margin outlook: EBIT margin rose 10 basis points despite salary increments that impacted costs by more than 100 basis points; management expects continued margin improvement in the second half.
• Order momentum: The order book is growing, including a $138 million full-vehicle program for a European luxury OEM. Management sees cost reduction by automakers amid Chinese competition and AI disruption creating opportunities for Tata Technologies’ complex and outcome-based engineering work.
• Regional demand: North American clients are pursuing AI-enabled initiatives and face skills-access constraints, which Tata Technologies addresses through global delivery. In Europe, Chinese competition is prompting German automakers to restructure costs and increase variable-cost capabilities.
• Adjacent sectors: Aerospace demand is expected to grow as commercial aircraft in productive use rise from 24, 25,000 today to beyond 40,000 in the next 15 years; Airbus is planning a replacement for the A320. Industrial heavy machinery typically lags automotive by 4 or 5 years, and management sees an emerging inflection there, including a full-vehicle program for a North American bus manufacturer.