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Tata Technologies Q3 FY26 Earnings Performance and Strategic Outlook

Executive Summary

Tata Technologies characterizes Q3 FY26 as a pivotal turning point, transitioning from a period of cyclical pressure to a phase of accelerated, structurally stronger growth. Despite seasonal headwinds and a significant cybersecurity disruption at a major client, the company delivered 3.2% sequential revenue growth in Indian Rupees, with the services business growing 4.7% sequentially.
The company has issued a robust outlook, forecasting sequential revenue growth in excess of 10% for Q4 FY26 and targeting double-digit organic growth for FY27. This optimism is underpinned by the successful integration of the Aztec acquisition, a resurgent automotive sector—marked by the first full vehicle program win in 18 months—and the continued rapid scaling of the aerospace vertical, which is on track to reach $40 million in revenue for FY26. While Q3 margins were suppressed by wage revisions and one-time legislative costs, management expects to exceed previous margin run rates in the coming quarter.

Financial Performance Overview
Revenue Metrics
• Total Revenue: ₹1,366 crores, representing a 3.2% sequential increase.
• Services Segment: Contributed 78% of total revenue, growing 4.7% sequentially in INR and 1% organically in constant currency.
• Technology Solutions: Revenue reached ₹306 crores. The products business grew 30% sequentially, driven by year-end PLM software budget spend.
• Education Business: Experienced a 22% decline due to temporary softness and slower decision cycles.
Profitability and Margins
• EBITDA Margin: 14.1% for Q3, down from a normalized 16.4% in Q2.
• Impact Factors: Margins were affected by annual wage revisions and the revenue impact of a cybersecurity incident at a major customer.
• Exceptional Items: The company recorded ₹164 crores in one-time expenses:
o ₹140 crores for employee benefit provisions following new Indian labor legislation.
o ₹24 crores in acquisition-related costs for Aztec.
• Net Income: Reported at ₹135 crores for the quarter.
Cash and Collections
• Net Cash Position: $58 million (down from $123 million in Q2, following the Aztec acquisition).
• Days Sales Outstanding (DSO): Increased to 111 days from 109 days, primarily due to higher DSO in products and education segments.
Vertical and Segment Analysis
Automotive (80% of Revenue)

The automotive sector remains the company’s core, though its share has decreased from 90% a year ago as other verticals scale.
• Strategic Win: Secured a strategic full vehicle program with a global OEM, the first such win in 18 months, signaling a return to product-led investment cycles.
• Shift to SDV: There is a deliberate move toward Software-Defined Vehicle (SDV) and embedded engineering. This area is considered more recurring and less cyclical than traditional mechanical turnkey programs.
• Anchor Client Dynamics:
o JLR: Impacted by a month-long cybersecurity disruption in October; however, billing resumed in November and December. JLR is prioritizing enterprise digitization and replacing legacy systems.
o Tata Motors: Growth is expected from the separation of the Passenger Vehicle (PV) and Commercial Vehicle (CV) entities, and the impending acquisition of IVCO by Tata Motors CV.
Aerospace
Aerospace has emerged as a major growth pillar, doubling its revenue annually for four consecutive years.
• Revenue Milestone: Anticipated to reach approximately $40 million in FY26.
• Airbus Partnership: Eight engineers were certified as Design Organization Approval (DOA) technical approvers, allowing the company to undertake safety-critical work.
• Capability Expansion: New engagements with U.S. aerospace engine manufacturers in propulsion and engineering.
Industrial Heavy Machinery (IHM)
• Growth: Delivered 10% sequential growth in USD terms.
• Focus: Strong momentum in the commercial truck sector and off-highway products, supported by strategic supplier status with a large commercial vehicle group.
Strategic Initiatives and Partnerships
Aztec Acquisition
The successful completion of the Aztec acquisition in November is a cornerstone of the company’s strategy to:
• Diversify the European automotive client base.
• Strengthen positioning in embedded electronics and SDV engineering.
• De-risk large client relationships by moving away from single turnkey program concentration.
BMW Joint Venture (JV)
• Scale: The JV has grown to over 1,500 engineers.
• Financial Impact: Share of profit from the JV increased 37% sequentially to ₹7.3 crores.
• Direct Business: The platform has enabled Tata Technologies to secure multiple direct framework agreements with BMW in Europe.
Talent and Operational Excellence
• Headcount: Total associates stand at 12,580.
• Attrition: Trailing 12-month attrition rose slightly to 15.8% (from 15.1%).
• Strategy: The company is prioritizing strategic hiring in AI, SDV, and cyber security rather than backfilling roles indiscriminately.
Future Outlook and Guidance
Period Revenue Guidance Margin Outlook
Q4 FY26 Sequential growth in excess of 10% Expected to exceed Q2 run rate (>16.4%)
FY27 Double-digit organic growth Targeting structural stability and defensibility
Key Growth Drivers for FY27
1. Normalization of Investment: Global OEMs are moving past geopolitical and regulatory uncertainty to recommit to multi-year product cycles.
2. Propulsion Agnostic Approach: The company is well-positioned to support OEMs regardless of their focus on ICE, Hybrid, or EV, though it notes a continued universal commitment to SDV intelligence.
3. Aerospace Momentum: Continued participation in the Airbus EME3 supply chain and expansion into defense-related backfill opportunities.
4. Portfolio Diversification: Reduced dependence on single-program cycles through a broader customer pyramid and increased focus on high-integrity regulated engineering.

4 days ago | [YT] | 0

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On March 24, 2025, the Indian government released updated economic data showing a pickup in industrial production and GST collections for February, suggesting the economy might be stabilizing after months of slowdown. A prominent business daily reported that India’s GDP growth forecast for FY 2024-25 was revised downward to 6.4% from 6.5%, reflecting weaker-than-expected urban demand. Separately, the Reserve Bank of India (RBI) hinted in a press release on March 24 that it might consider a 25-basis-point rate cut in its next meeting, lifting market sentiment. Analysts cited this as a response to inflation holding steady below 6%, offering room for monetary easing.

10 months ago | [YT] | 1

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Mark Coombs at the Global Wealth Summit

### Global Investment Landscape

- Global investing faces reshaping due to “Trumponomics” - mix of tariffs, tax, and America First policies
- Policy uncertainty remains key challenge for investors who seek certainty and clarity
- Tariffs being used as geopolitical negotiating tool rather than permanent policy
- $26 billion moved out of Indian equities in last 6 months
- US recession possible but not likely in next 3 months
- Interest rates expected to remain in narrow band

### China vs India Investment Outlook

- China challenges:
- Massive youth unemployment
- Opaque policy environment
- Uncertainty for non-Chinese investors
- Stock market relatively cheap but difficult for long-term structural investment
- Foreign investors view China as tactical opportunity only
- India advantages:
- Greater policy certainty and structural reform
- Digitalization initiatives bringing more people into financial system
- More attractive for long-term structural investment
- Moving toward becoming standalone asset class within 5 years
- Global investors increasingly requesting India-only investment vehicles

### Market Dynamics & Capital Flows

- Emerging market outflows:
- Major outflows in 2023
- Reduced outflows in 2024
- American capital “hiding behind the sofa” in 2022-2024
- US Dollar outlook:
- Currently expensive
- Needs to weaken
- Rate cuts unlikely to drive weakness
- US now major debtor to rest of world
- Foreign investors reaching US dollar exposure limits
- Euro expected to see support over next year

### Ashmore’s India Strategy

- Long-term commitment to Indian market
- Investment across multiple asset classes:
- Bonds
- Equities
- Private capital
- Private debt
- Private equity
- Building domestic asset management business
- India identified as one of 5-6 key economies for major Ashmore presence
- Focus on serving both domestic institutions and retail investors
- Strategy to manage Indian money locally rather than just bringing global capital

10 months ago | [YT] | 0

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#MorganHousel at the Global Wealth Summit

### Market Context

- US market showing volatility with several “wobbly” sessions
- Indian market experienced painful correction, now stabilizing
- Current market characterized as “narrative-based”

### Role of Narratives in Investing

- Investment valuation equation: Today’s numbers × Future story
- Stories/narratives often more influential than quantitative metrics
- Low interest rates (e.g., US 0% rates) amplify narrative importance
- Social media enables rapid spread of investment narratives

### Automotive Industry Case Studies

- Tesla vs Traditional Manufacturers
- Tesla produces fraction of competitors’ volume
- Values 20-50x higher than traditional manufacturers
- Ferrari vs Volkswagen comparison
- Ferrari: 13,000 cars/year, $90B valuation
- Volkswagen: 9M cars/year, $40B valuation
- Valuation gap primarily driven by narrative/brand perception

### Market Analysis Approaches

- Analytical/spreadsheet approach limitations
- Can lead to constant confusion about market behavior
- May perceive everything as bubble or irrational
- Narrative-based understanding
- Accepts market irrationality
- Recognizes limitations of pure statistical analysis
- More effective for understanding modern markets

### Key Takeaways

- Markets have always been and will continue to be narrative-driven
- Narratives constantly evolve and change
- Pure quantitative analysis insufficient for modern market understanding
- Need to balance both numerical and narrative factors in investment decisions

10 months ago | [YT] | 0

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Which Indian Stock Screams “Peter Lynch” to Me?
Hey there, Indian stock market enthusiasts! Peter Lynch’s One Up on Wall Street is all about finding winners you can spot in everyday life—fast growers, turnarounds, or undervalued gems with solid fundamentals. As of March 08, 2025, one stock screams “Lynch” to me: Dixon Technologies. Let’s break down why it fits Lynch’s playbook, tailored for you as an Indian investor.
Why Dixon Technologies?
Fast Grower Vibes
Lynch loved small companies with explosive growth potential—his “ten-baggers.” Dixon, an electronics manufacturing services (EMS) player, fits the bill. Q3FY25 revenue jumped 30% YoY to ₹4,697 crore, with PAT up 45% to ₹132 crore, driven by mobile phones and LED TVs. Its market cap (~₹35,000 crore) is still mid-sized, with room to scale in India’s booming consumer electronics space.
Invest in What You Know
Lynch urged investors to pick stocks from their daily lives. Dixon makes stuff you see everywhere—Redmi phones, Samsung TVs, Boat earbuds. Walk into any electronics store, and Dixon’s behind the scenes, cashing in on India’s “Make in India” push and the $20 billion EMS market growing at 20% CAGR.
Fundamentals Lynch Loves
P/E (60) is high, but Lynch was okay with premium valuations for growth. Revenue’s grown at a 40% CAGR over five years, with ROE at 22%. Debt-to-equity is low (0.3), and cash flow tracks profits—no red flags like IREDA’s 50% drop from peak. It’s not cheap, but Lynch would see the earnings trajectory justifying it.
Under-the-Radar Edge
Dixon’s not as hyped as Reliance (up 3.18% on March 7) or Tata Steel, giving retail investors an edge over FIIs (who’ve sold $13.8 billion by Feb 2025). Its 25% export growth in Q3FY25 hints at global potential—classic Lynch territory.
Indian Market Parallel
Think of Dixon as India’s answer to Lynch’s Chrysler turnaround or Dunkin’ Donuts growth story. It’s not a slow stalwart like Nestle India (P/E ~60) or a cyclical play like Tata Steel (P/E ~10)—it’s a fast grower with a consumer twist, riding India’s tech wave like Titan did with jewelry.
Why Not Others?
Transrail Lighting (up 5% on ₹2,752 crore orders) is close—small and growing—but lacks Dixon’s consumer visibility.

Sanofi India (up 4%) is too steady, more Graham than Lynch.
Verdict
Dixon Technologies screams “Lynch” for its growth, everyday relevance, and fundamentals. At ₹5,850 (March 08, 2025), it’s not dirt cheap, but Lynch would say: “Pay up for a winner you understand.” What’s your “Lynch” pick? Let’s dive deeper!

10 months ago | [YT] | 0

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Q3FY25 Results: Companies Where I Smell a Rat
Based on Q3FY25 data, market trends (e.g., FII outflows of $13.8 billion by Feb 2025), and forensic red flags, here’s where my nose twitches. Note: This isn’t definitive proof—just a starting point for deeper research. Data reflects reported figures and market chatter up to March 08, 2025.
IREDA (Indian Renewable Energy Development Agency)
Red Flag: Revenue up, but a 7% drop on March 7 after F&O entry and a 50% fall from its peak scream volatility. Cash flow details are murky—Q3FY25 PAT was flat despite sales growth.

Suspicion: Possible revenue overstatement or aggressive booking to prop up its renewable hype. Check cash flow vs. receivables.
Tech Mahindra
Red Flag: IT sector’s 0.5-1% weekly drop (down 5% for 7 sessions) amid tariff fears, yet Q3FY25 revenue grew 8% YoY to ₹10,851 crore. Cash flow didn’t mirror this—operating margins shrank to 11%.

Suspicion: Could be capitalizing costs or delaying expense recognition to mask US slowdown impact.
Adani Enterprises
Red Flag: Revenue spiked 19% YoY to ₹28,339 crore, but debt levels (₹62,853 crore) and related-party deals in footnotes raise eyebrows. Cash flow from operations grew slower than reported profits.

Suspicion: Off-balance sheet entities or asset overvaluation—post-Hindenburg, transparency’s still a question.
Vodafone Idea
Red Flag: Q3FY25 revenue up 5% to ₹15,526 crore, but losses widened to ₹7,885 crore. Receivables ballooned, and cash flow remained negative despite ARPU hikes.

Suspicion: Booking uncertain sales or not provisioning for bad debts—classic telecom trick.
Suzlon Energy
Red Flag: Sales rose 30% YoY to ₹1,692 crore, PAT flipped to ₹203 crore from a loss, yet inventory spiked 25% QoQ. Cash flow growth lagged sales.

Suspicion: Inventory overstatement or premature revenue recognition to boost turnaround narrative.

10 months ago | [YT] | 0

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Today, let’s dive into Easy Prey Investors: Why Money Is Still at Great Risk by Al and Mark Rosen—a must-know book for anyone trading on the BSE or NSE. Written by two Canadian forensic accountants, this 2017 gem exposes how weak regulations and shady financial reporting leave investors vulnerable. While it’s rooted in Canada’s market, the lessons hit home for India’s 50 million+ retail investors as of March 08, 2025. Here’s the breakdown in 300 words, perfect for your YouTube watchlist!
The Rosens argue that regulators and auditors often fail to protect investors, letting companies fudge numbers. They trace this back to a 1997 Canadian court ruling that shielded auditors from lawsuits—think of it like SEBI giving a free pass to dodgy CAs here. This lax oversight led to scandals where financial statements hid risks, leaving investors blindsided. For India, it’s a red flag—think of cases like IL&FS or DHFL, where opaque reporting burned shareholders.
Key lessons? First, don’t trust financials blindly. The book shows how audited statements can mask debt or inflate profits—sound familiar with some Indian smallcaps? Look at IREDA’s 50% drop from its peak by March 2025—hype outran reality. Second, dig deeper. The Rosens push for skepticism—check cash flows, not just EPS. Reliance Industries’ 25% YTD gain by March 2025 came from solid fundamentals, not fluff. Third, regulation matters. Canada’s weak enforcement mirrors India’s struggles—FII outflows of $13.8 billion by Feb 2025 partly reflect trust issues.
For Indian YouTubers, this isn’t about flashy trades—it’s a wake-up call. The Rosens suggest picking stocks with transparent books (e.g., ITC, P/E ~25) and avoiding overhyped traps. Their fix? Stronger laws and auditor accountability—something SEBI could tighten post-2025 crackdowns.
Verdict: If you’re chasing value like Graham or Buffett, this book’s for you. It’s dry but packed with real-world warnings. Grab it, skip the hype, and protect your portfolio. What’s your take—how do we spot India’s “easy prey” stocks? Drop a comment and let’s talk fundamentals!

10 months ago | [YT] | 0

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20 Indian Stocks Based on Graham’s Philosophy
Graham’s approach favors stocks with low P/E, strong balance sheets (low debt), consistent earnings, and dividends—offering a margin of safety. Here’s a list based on March 2025 data, market trends (e.g., smallcap resilience, FII outflows), and Graham’s criteria. Note: Exact financials evolve, so these are illustrative picks rooted in his principles.
Coal India: High cash reserves, low P/E (~8), consistent dividends—undervalued despite production hiccups.

NTPC: Stable utility, low debt, P/E ~10, steady earnings from power demand.

GAIL India: Gas utility with strong assets, P/E ~12, benefits from energy transition.

Hindustan Zinc: Debt-free, high ROE, P/E ~15, tied to metal demand.

ITC: Diversified FMCG, P/E ~25, strong cash flow, undervalued vs. peers.

Nestle India: High-quality consumer goods, consistent earnings, though P/E (~60) tests margin of safety.

Bajaj Auto: Low debt, P/E ~20, reliable dividends from two-wheeler sales.

HCL Technologies: Stable IT player, P/E ~25, less volatile than peers.

Tata Steel: Asset-heavy, P/E ~10, cyclical but offers safety at dips.

ONGC: Oil & gas giant, P/E ~8, undervalued with energy tailwinds.

Power Grid Corp: Defensive utility, P/E ~15, steady dividends.

Bharat Petroleum: Refining strength, P/E ~10, attractive at current levels.

Hero MotoCorp: Two-wheeler leader, P/E ~18, consistent performer.

Indian Oil Corp: Low P/E (~8), strong refining assets, dividend payer.

NMDC: Mining play, P/E ~12, cash-rich, tied to steel demand.

Vedanta: High dividends, P/E ~15, value in resources despite debt.

Bank of Baroda: PSU bank, P/E ~7, improving NPAs, margin of safety.

Tata Power: Growing renewable focus, P/E ~20, stable cash flows.

Dabur India: FMCG with low debt, P/E ~35, steady growth.

Exide Industries: Battery maker, P/E ~18, undervalued vs. EV potential.
Why These Stocks?
Low P/E & Debt: Stocks like Coal India, ONGC, and Bank of Baroda trade below sector averages (e.g., Nifty P/E ~22), offering a buffer.

Earnings Stability: Nestle, ITC, and Bajaj Auto show consistent profits, aligning with Graham’s focus.

Dividends: Many (e.g., Power Grid, Hindustan Zinc) pay reliable dividends, a Graham hallmark.

Indian Context: Reflects 2025 trends—energy resilience (Reliance up 3.18%), smallcap order wins (Transrail), and FII exits creating bargains.
These picks lean defensive but include enterprising value plays. Graham would approve their fundamentals over market hype. Which lesson or stock intrigues you? Let’s dig in!

10 months ago | [YT] | 1

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Global News
US Federal Reserve Chair Jerome Powell’s Remarks: On March 7, Powell stated the US economy is “in a good place,” calming markets after early declines. However, uncertainty over US trade policies, particularly tariffs under the Trump administration, led to Wall Street’s worst weekly drop in months. The S&P 500 and Nasdaq posted their third straight weekly decline, with tariff fears dragging sentiment. This global volatility could pressure Indian IT stocks like Tech Mahindra and Wipro, down up to 5% this week, amid a slowing US economy.

US Tariff Concerns: Morgan Stanley cut its 2025 US growth forecast due to tariff risks, while Canada pledged over C$6 billion to counter US tariff impacts. Trump softened his stance on auto tariffs from Canada and Mexico, boosting automaker stocks like Ford and GM globally. This mixed signal might stabilize Indian auto ancillary stocks like Tata Motors, which gained 1.36% on March 7.

Broadcom and Tech Sector: Broadcom shares faced pressure amid concerns over AI spending and Trump’s tariff policies, including a potential TikTok ban by April 5. This could indirectly affect Indian tech firms with US exposure, like Infosys and HCL Tech, which slipped on March 7.
Indian News
Market Performance: The Sensex closed flat at 74,332.58 (down 8 points), and Nifty 50 edged up 0.03% to 22,552.50. Smallcaps rose 0.7% for the fourth straight session, while midcaps dipped 0.3%. Reliance Industries (up 3.32%) and Nestle India (up 1.69%) were top Nifty gainers, buoyed by energy and consumer goods strength, while IndusInd Bank and NTPC lagged.

Sectoral Trends: Capital goods, energy, and metals rose 0.5-2%, with Bharat Electronics up 1.48%. IT and power sectors fell 0.5-1%, reflecting global tech weakness. Shakti Pumps and Mukka Proteins also gained attention amid smallcap resilience.

FII Outflows: Foreign Institutional Investors pulled out $13.8 billion by February 2025, reducing India’s global market cap share to 3.6%—a 16-month low. This, coupled with slowing earnings, could cap upside for stocks like HDFC Bank.
Stock-Specific Impacts
Reliance Industries: Up 3.18%, likely benefiting from falling crude prices and energy sector optimism.

Sanofi India: Rose 4% on strong topline growth, despite a profit dip.

IREDA: Slumped over 7% after entering the F&O segment, down 50% from its peak.

Transrail Lighting: Surged 5% on ₹2,752 crore in new orders.
Buy/Sell Call
The Indian market showed resilience despite global tariff jitters. With Nifty above 22,550 and a strong order-driven smallcap rally, selective buying opportunities exist. However, global uncertainty warrants caution. I recommend a Hold on broad indices, with a Buy on Reliance and Transrail Lighting for their momentum, and a Sell on IREDA due to its sharp correction.
What’s your take on these market moves? Let’s discuss!

10 months ago | [YT] | 0

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For long term investors it is never a sell on recovery

10 months ago | [YT] | 0