Tata Technologies reported a 5.1% sequential growth in services and 6.4% overall revenue growth in Q2 FY26. The company signed an agreement to acquire ES-TEC, enhancing its European automotive engineering capabilities. Aerospace led growth, while automotive regained momentum. Adjusted EBITDA margin improved to 16.4%. A ₹10 crore one-time cyber incident expense impacted results.
Financial Performance Highlights
Tata Technologies announced a revenue growth of 6.4% in Indian rupees for Q2 FY26, reaching ₹1,323 crores. The services business grew by 5.1% sequentially, contributing 77% to the total revenue. The company’s Technology Solutions portfolio saw a strong 10.6% sequential growth, driven by both Education and Products segments.
Segment Performance
The Aerospace and Industrial Heavy Machinery segments delivered a 14% revenue growth in US dollar terms. Automotive vertical also regained positive momentum, recording a 0.5% sequential increase in US dollar terms, indicating stabilization and improving demand.
Margin and Profitability
Reported EBITDA margin for the quarter was 15.7%. However, adjusting for a one-off cyber incident-related expense of approximately ₹10 crores, the normalized EBITDA margin improved to 16.4%. Operating profit or EBIT grew 4.6% quarter-on-quarter to ₹190 crores.
Strategic Acquisition of ES-TEC
Tata Technologies signed a definitive agreement to acquire ES-TEC, a move aimed at strengthening its European presence and automotive engineering capabilities. ES-TEC brings advanced capabilities in ADAS, Connected Driving, and Embedded Software. This acquisition provides direct access to Volkswagen and strengthens Tata Technologies’ leadership position in Germany.
Operational and Innovation Milestones
The company introduced the Digital Key feature for an Indian automotive OEM and launched WATTSync, a digital battery passport platform. Tata Technologies also achieved ASPICE Capability Level 3 Certification and announced a strategic partnership with Synopsys.
Future Outlook
Tata Technologies remains cautiously optimistic about the second half of fiscal year 2026. The company anticipates some moderation in momentum during Q3, primarily due to near-term temporary headwinds, but expects a recovery in Q4 supported by recent deal wins and improving demand signals. There are some headwinds because of the JLR IT systems still being restored.
Source: BSE
