Tata Technolog.

Tata Technologies delivered a strong Q4 FY26, with total revenues growing 12.4% in constant currency to INR 1,572 crores, exceeding guidance. Services revenue grew 11.9% CC to INR 1,220 crores, with organic growth contributing 8.8% CC. The EBITDA margin expanded by 200 basis points sequentially to 16%, reflecting operating discipline. Automotive segment grew 13.6% in USD terms, Technology Solutions expanded 12% sequentially, and the Education business grew 40% Q-o-Q.

The company secured 4 large deals in Q4 and 2 additional milestone wins in April, including a multi-year PLM service transformation for a European luxury automotive OEM and a Full-Vehicle Program with a Japanese automotive OEM. These multi-year, multi-domain programs typically extend 18-36 months with deal values in the tens of millions of dollars. These wins enhance geographic and customer diversification, reducing reliance on anchor clients and strengthening the Asia footprint.

EBITDA margin improved to 16% in Q4, a 200 bps sequential increase, driven by operating discipline and early benefits of operating leverage. Management highlighted a deliberate choice to protect delivery capacity and invest through the downturn, which is now translating into healthier economics. The company expects to achieve an operating margin run rate exceeding 18% by the exit of FY27, supported by robust services growth, offshoring, mix improvement, and AI deployment.

Total headcount stood at 12,646 associates, with a net addition of 66 sequentially. Voluntary attrition marginally increased to 16.2% but is considered manageable. The company continues to invest in talent development, with 85% of the workforce covered by TechVarsity and over 50% of the engineering workforce now AI-ready. Proprietary Chromosome AI is being deployed across delivery LOBs to improve engineering efficiency, reduce costs, and compress product-development timelines.

Tata Technologies guides for double-digit organic revenue growth in FY27, excluding inorganic contributions. They also expect to exit FY27 with an operating margin run rate exceeding 18%. The long-term 'North Star' revenue target remains $1 billion, which management believes is achievable within the next 2-3 years through sustained organic growth and potential inorganic transactions, leveraging strong deal visibility and customer engagement.

The company reported a strong net cash position of INR 1,188 crores at quarter-end, a significant increase from INR 524 crores in Q3. Collection efficiency improved, with total DSO at 95 days. For FY26, the business generated INR 742 crores in free cash flow, representing an 87% EBITDA-to-FCF conversion. The Board recommended a final dividend of INR 8.35 per share and a special dividend of INR 3.35 per share for FY26, totaling INR 11.70 per share, representing a 62% payout.