Tata Technologies, an engineering services and product development IT services company, expects strong growth in the next 3-5 years as its new Bengaluru facility scales up operations, its chief executive said.
The company, 74 percent owned by Tata Motors, India’s third largest carmaker, is looking at both organic and inorganic growth prospects, its Managing Director and CEO Warren Harris told Moneycontrol.
“Certainly the company is very much open to accelerating growth organically and inorganically. The capital we have the access to provides us with the funds we would need to deliver against the plans we positioned for.”
The company is ramping up operations of its new software engineering centre at Bengaluru, which was inaugurated in October 2020. The facility, set up in collaboration with UK-based GKN Automotive, currently has a headcount of 100. There has been a significant rise in demand over the past few months across the key international markets with the opening up of demand.
“In the latter part of FY21 we saw the confidence of the marketplace improving despite going through multiple lockdowns in key territories like Europe, North America and China and Asia Pacific. We have never had an order book which is as strong as the order book we have got at the moment. We have delivered five quarters of sequential growth after the initial downturn at the beginning COVID-19 and we certainly expect that to continue during this fiscal,” Harris added.
Electric vehicles have taken centre stage for Tata Technologies since most of its clients - Indian brands and global - are working in that sphere.
“Almost all our product development activities at the moment have some form of electrification. A lot of the work we are doing is really about building an electrical architecture that supports the type of passenger and driver experience that many of our customers are building strategies and plans around,” Harris added.
IPO Plans
In the recent past, Tata Technologies tried to raise funds through an initial public offering (IPO). Tata Motors also held talks with private equity companies for divesting stake in Tata Technologies. However, neither of these plans materialized. Harris declined to say if the IPO plans are back on the discussion table of the board of directors.
“The board and shareholders are always looking at opportunities to accelerate the progress of the company. I cannot comment if there is any discussion on the IPO within the board. We have an extremely strong balance sheet. We have no debt; we have over $150 million on our balance sheet. We have the ability to invest where it is required,” Harris said.
With demand coming back strongly across major markets companies are feeling the urge to scale up operations in a spurt. However, most companies are finding it difficult to find the right talent.
“Attracting people is going to be a challenge as well as building the type of skill sets that are aligned with the vectors of change in the industry. We are building for what would be an outstanding 3-5 years for the industry and more specifically for our company,” Harris added.
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