Tata Technologies: Target Price Set at Rs 560 by Prabhudas Lilladher
Tata Technologies Reports Strong Q4 Revenue Growth, Raises FY27E Estimates
Tata Technologies has reported a strong Q4 revenue growth of 12.4% quarter-on-quarter (QoQ) constant currency (CC), surpassing Prabhudas Lilladher's estimate of 8.2%. This growth was driven by robust organic Services growth of approximately 8% QoQ CC. Within the Services segment, the auto segment experienced a growth of 13.2% QoQ, supported by higher ES-Tec contribution (additional two months of consolidation in Q4), normalization in anchor client, and strong traction in non-anchor accounts.
The non-auto segment sustained momentum in Q4, with the Aerospace vertical reaching an annualized run-rate of approximately US$ 40mn. The strong Q4 exit, coupled with improving deal signing activities (two strategic full-vehicle programs won in Q4 and two additional wins closed in April 2026), provides confidence to the management in delivering double-digit organic Services revenue growth in FY27. In light of this, Prabhudas Lilladher has raised its FY27E consolidated revenue growth estimate (organic + inorganic) to 15.6% (earlier 14.1%), while lowering FY28E to 10.1% (earlier 11.9%) due to base effect.
| Estimate | FY27E | FY28E |
|---|---|---|
| Revenue Growth (organic + inorganic) | 15.6% | 10.1% |
| Reported EBIT Margin | 14.1% | 15.0% |
| Net Other Income |
On the margin front, management expects improved operating performance supported by volume-led operating leverage, a better offshore mix and pyramid, and AI-led productivity gains. Prabhudas Lilladher has largely factored these into its estimates and maintains reported EBIT margin estimates at 14.1% and 15.0% for FY27E and FY28E, respectively. However, the firm lowers its net other income estimates due to higher finance costs on the US$60mn loan availed for the ES-Tec acquisition and lower contribution from the BMW JV following a miss in Q4FY26, resulting in an EPS cut of approximately 8% and 9% for FY27E and FY28E, respectively.
Prabhudas Lilladher assigns a PE multiple of 25x to FY28E earnings, arriving at a target price of INR 560, and downgrades the stock to HOLD (BUY earlier).
Investor Takeaway
Investors should consider Tata Technologies for its strong Q4 revenue growth and improving deal signing activities.
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