Tata Tech Q2 FY26: Management on deal wins, JLR IT restoration & attrition

Tata Technologies Ltd reported sequential revenue growth of 6.4 per cent in Q2 FY26, reaching Rs 1,323 crore, despite a macroeconomic environment marked by uncertainty. On a constant currency (cc) basis, total revenues increased by 4.5 per cent, the company stated in a recent earnings call.

Savitha Balachandran, Chief Financial Officer (CFO) at Tata Tech, noted, "Our services business, which contributes 77 per cent of total revenue, grew 5.1 per cent sequentially to Rs 1,013 crore and by 3 per cent in constant currency, in line with the outlook we shared during last quarter's call. While we continue to see some delays in ramp-up of large deals and protracted decision cycles, this quarter's growth was supported by contributions from deals closed in the last quarter, along with a strong performance in the Aerospace and Industrial Heavy Machinery segments."

The aerospace and industrial heavy machinery segments delivered a 14 per cent sequential revenue increase in US dollar terms, driven by steady demand and consistent execution across MRO, PLM, manufacturing engineering and digital transformation engagements.

Looking ahead to H2 FY26, Balachandran said the company remains cautiously optimistic. "While Q2 marked a return to growth, we expect some moderation in momentum during Q3, primarily due to near-term temporary headwinds. That said, we anticipate a recovery in Q4 supported by recent deal wins, improving demand signals and normalisation of customer operations."

The technology solutions portfolio, contributing 23 per cent of revenue, recorded 10.6 per cent sequential growth this quarter. The Education business saw a meaningful recovery as previously deferred projects moved into execution, supported by a healthy pipeline and traction across key accounts.

Reported EBITDA stood at Rs 208 crore, up 3.8 per cent sequentially. Adjusting for a one-time consulting expense of over Rs 10 crore, the normalised EBITDA margin was 16.4 per cent, reflecting a 30 basis points (bps) quarter-on-quarter improvement. Operating profit (EBIT) rose 4.6 per cent sequentially to Rs 190 crore. Tata Tech's share of profit from its BMW joint venture grew 10.6 per cent sequentially to Rs 5.3 crore, contributing Rs 13.6 crore, or 6 per cent to overall pre-tax profits.

Warren Harris, CEO and MD at Tata Tech, highlighted the company's role in supporting Jaguar Land Rover's (JLR's) phased restoration of IT infrastructure. He noted, "There could be, and I want to stress could be, some impact in the next couple of months. We are working hand in glove with JLR to ensure they restore their production and enterprise IT systems to pre-incident levels."

On human resources, CHRO Geena Binoy stated that attrition increased from 13.8 per cent in Q1 to 15.1 per cent in Q2. She added, "This attrition is broadly in line with industry trends, mainly in engineering roles due to talent movement to GCCs and OEMs."

The company continues to invest in digital infrastructure, global expansion, including a new Munich office, and people capabilities aligned with business requirements, while navigating short-term operational headwinds and salary revisions in Q3.

Meanwhile, shares of Tata Tech rose 0.57 per cent to close at Rs 685.10 on Tuesday. The stock market remained closed on Wednesday for 'Diwali Balipratipada'.