Shares of Tata Technologies surged nearly 3% during intraday trading, reaching Rs 720.75, their highest level in over a month, following the announcement that its wholly-owned subsidiary, Tata Technologies Pte., will acquire full ownership of Germany-based ES-Tec group from MW Beteiligungs GmbH for 75 million euros (approximately Rs 776 crore).
The deal, announced on September 13, is anticipated to close by December 31, 2026. Although the firm's shares trimmed some gains by the end of the trading session, they still closed 1.4% higher at Rs 711.9 on the National Stock Exchange.
According to a filing with the stock exchange, the payment for the acquisition will be spread over the next two years and will include performance-based earnouts. Tata Technologies stated that the acquisition will strengthen its engineering, research, and development capabilities, expanding its comprehensive service offerings for global automotive clients.
Warren Harris, MD & CEO of Tata Technologies, described the acquisition of ES-Tec Group as a strategic move that improves the company’s ability to provide end-to-end product engineering solutions throughout the automotive value chain. He emphasised that the deal reflects the company's commitment to expanding its global reach and tapping into innovative engineering capabilities. Harris added that ES-Tec’s technical expertise, customer focus, and regional presence align well with Tata Technologies’ goal to be the preferred partner for global original equipment manufacturers (OEMs) as the industry transitions toward smart, connected, and sustainable mobility.
The acquisition is expected to boost Tata Technologies’ presence in Europe’s advanced automotive sector, leveraging local talent and strong systems engineering expertise. The company also expects the deal to increase earnings per share starting from the first full year after completion.
ICICI Securities, in a report dated September 15 and cited by Informist, noted that ES-Tec is projected to contribute roughly 8% to Tata Technologies’ revenue going forward. The brokerage mentioned that the acquisition aligns with OEMs' R&D priorities and will enhance cross-selling opportunities among prominent global automotive customers, based on insights from Tata Technologies' management.
On the other hand, JPMorgan maintained an 'underweight' rating on Tata Technologies, forecasting a 4.6% decline in revenue on a constant currency basis and a 100 basis point drop in margins for FY26, with a target price of Rs 570.
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