BENGALURU (Reuters) – India’s Tata Technologies reported a near-15% climb in profit in its first results since going public, helped by strong demand from the automobile sector.
The unit of Tata Motors reported a consolidated net profit of 1.70 billion rupees ($20.5 million) for the quarter ended Dec. 31, compared to 1.48 billion rupees a year ago.
The company, the first Tata Group entity to go public in nearly two decades, was valued at $6.4 billion in a smashing debut in November.
Tata Technologies provides engineering and technology services to auto, aero and heavy machinery makers.
Analysts at JM Financial said companies such as Tata Technologies stand to benefit from the automotive sector’s push towards electrification and digitisation.
“We remain positive on customer spending in the automotive vertical as original equipment manufacturers continue to pivot towards electrification and other alternative propulsion systems. The aerospace industry is looking upbeat, with a good pickup in demand there,” CEO Warren Harris said in a statement.
The company said it won five large deals in the quarter, including one contract valued at over $50 million.
Its revenue from operations rose 14.7% to 12.89 billion rupees, led by a 9.3% revenue growth in its services segment, which accounted for nearly 78% of revenue.
Meanwhile, expenses rose 14.5%, though it came in at a lower 10.85 billion rupees. The company attributed it mainly to higher purchases of technology solutions and employee-related expenses.
Shares of Tata Technologies closed marginally higher ahead of the results. Though they have fallen 12.8% since listing, they are still 129% higher than the initial public offer price of 500 rupees.
Rival KPIT Technologies is set to report its results on Tuesday.
($1 = 83.0820 Indian rupees)
(Reporting by Rama Venkat in Bengaluru; Editing by Varun H K)
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