BENGALURU (Reuters) – India’s Tata Technologies reported a 15% fall in first-quarter profit on Thursday, hurt by declining revenue from its services segment and higher expenses.
The company, which provides engineering and technology services to auto, aero and heavy machinery makers, said its consolidated net profit after tax declined to 1.62 billion rupees (around $19 million) in the quarter ended June 30 from 1.92 billion rupees earlier.
Analysts’ notes point towards a heavy dependence on client orders, including from major ones such as parent Tata Motors – which dominates India’s small but growing EV market – and Vietnamese EV company VinFast.
Revenue from VinFast, however, declined in the preceding quarters, with analysts saying the effects of the cut would have “bottomed out” in the April-June quarter.
Tata Technologies’ profit fell 27% in the quarter ended March 31 due to similar reasons.
Revenue from its services segment fell 0.5% in the quarter, while its smaller technology solutions segment’s revenue grew 6%.
Overall revenue for the June quarter rose just 0.3%, and, together with a 12% rise in expenses, hit the company’s bottomline.
While the company did not provide a breakdown of the revenue decline from VinFast, CEO and Managing Director Warren Harris said in a statement that the VinFast transition is now largely behind and added he expects the sequential revenue growth in the services business to accelerate from the current quarter.
The June quarter marks the third quarterly earnings for the Tata Motors unit, which went public in a smashing debut in November at a valuation of $6.4 billion.
($1 = 83.6130 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Janane Venkatraman)
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