Tata Technologies Ltd

Envisioning a better world

Dear Shareholders,

I trust and hope you and your families are doing well. I am delighted to share my thoughts on your company's performance in FY 2023-24, a remarkable year in the history of Tata Technologies. On November 30, 2023, Tata Technologies debuted on the public markets, becoming the first Tata Group company to do so in 19 years. Your company's IPO was a tremendous success, listing at 1,200 against an issue price of 500, reflecting a 140% premium. The overwhelming response to the IPO, with over 73.4 lakh applications, set a record for the highest number of retail applications for an Indian IPO.

This success is a testament to your trust and confidence in our vision and value proposition.

Your company's financial performance in the last few years has been robust. For FY 2023-24, total operating revenue increased 15.9% year-on-year, reaching 5,117.20 crore. Revenue from the services segment was 3,982.61 crore, up 12.8% year-on-year. Total Operating EBITDA increased 14.7% year-on-year to 941.28 crore. In the last 3 years, our revenue from operations has grown at a 29% compound annual growth rate, with operating EBITDA growing at 35% CAGR. Profit Before Tax (PBT) was up 17.1% YoY to 932.05 crore. These results reflect our strong operational efficiency and our commitment to creating value for our shareholders.

The global manufacturing industry is undergoing an unprecedented transformation, driven by multiple megatrends around Artificial Intelligence, sustainability and supply chain resilience. These are reshaping business priorities across multiple industry verticals including Automotive, Aerospace, and Industrial Heavy Machinery. As companies focus on launching new products faster and delivering great customer experience, your company is at the forefront of this transformative change, actively working with customers to integrate systems engineering to optimize product development time and cost and develop software-defined electric vehicles that deliver great experience. We have strengthened our software-defined vehicles (SDV) ecosystem significantly over the last 12 months by partnering with leading technology players like NXP, Arm, Intel, and Amazon AWS to profile software-defined vehicle platform solutions for high-performance computing, next-generation digital cockpit solutions, and cybersecurity. Generative AI is likely to impact the manufacturing industry significantly going forward. We are making good progress in deploying Gen AI solutions for our customers in engineering, manufacturing, and various aspects of the customer experience value chain. Despite Gen AI's adoption in manufacturing still being relatively nascent, we are currently implementing solutions that deliver tangible value to our customers.

Given the significant impact that Gen AI will have on the manufacturing sector, we are making material investments in training and capability building. In Q4 alone, we trained almost 1,000 engineers and we have curated specialized learning paths and training programs that will ensure that more than 10,000 of our engineers are trained in basic Gen AI skills with a further 2,000 engineers receiving intermediate-to-advanced Gen AI training over the next 12 months.

Your company celebrated significant milestones with key customers such as BMW, Agratas, Tata Motors, and JLR in FY 2023-24. BMW's decision to select Tata Technologies as a JV partner followed an exhaustive 12-month evaluation of candidate Indian engineering services firms, many of which had incumbent relationships with BMW. The fact that BMW selected Tata Technologies is a testament to the breadth and depth of our capabilities and the trust that underpins the Tata Technologies brand. Through the collaboration with Agratas, Tata Technologies will expand its upstream capabilities, strengthening its end-to-end Electric Vehicle design and development capabilities. This will enable Agratas to accelerate product development, including the design and integration of battery cells into modules and packs for global customers in the mobility and energy sectors. At Tata Motors, we recently completed the rollout of a smart manufacturing solution for the new Sanand plant where we were responsible for architecting and deploying a solution that fully integrates ERP, PLM, MES, and IoT systems that have enabled Tata Motors to increase its annual production capacity by 300,000 units. At JLR, we cemented our position at the heart of their digital transformation program by accelerating the deployment of S4 Hana for a targeted number of their production facilities. Customers value the depth and breadth of knowledge and experience our integrated global teams bring to their entire enterprise—across engineering & design, smart manufacturing, and digital engineering, as is evident from the customer feedback NPS scores, which is amongst the top 10 percentile among technology services players. With our core values of a can-do attitude, a global mindset, and a one team with customers approach, we anticipate and invest ahead of customer needs, ensuring they can continue to achieve success in their businesses.

Your company's workforce, now over 12,500 professionals strong, remains our greatest asset. Through learning initiatives and our Diversity, Equity, and Inclusion (DEI) programs under Rainbow, we ensure our people have the skills and opportunities to excel. Your company's inclusive culture fosters innovation and collaboration, driving our mission forward.

Your company's commitment to community service is steadfast. Through CSR initiatives such as Ready Engineer, the EVE program, and STEM initiatives, we have positively impacted over 36,000 lives. We are dedicated to providing education and upskilling opportunities, helping our communities to live better lives.

As I look ahead, I am more optimistic than ever about the enormous opportunity ahead of us. The global manufacturing industry will continue to be transformed by the move towards software-defined and Gen AI-enabled products and your company is the best-positioned service provider to partner with many of these companies as they leverage technology to secure their future success.

I extend my deepest gratitude to all our shareholders, whose trust and support have been instrumental in our achievements. We remain committed to leading our industry in software-defined services and developing more sustainable automotive solutions, creating innovative solutions for our customers and society. Together, we are building a sustainable future for the automotive industry and beyond, true to our vision of engineering a better world.