In pursuit of rewarding their shareholders, Tata Tech recently revealed a final dividend of Rs 8.40 per share. On the other hand, the performance of the company for January-March quarter did not impress investors who responded with lukewarmness in the market. This is after its shares dropped by 5% on May 6th following weak quarterly results. At NSE, Tata Tech’ shares were trading at Rs 1,041.80 apiece at 09:55 am.

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During March quarter, net profit fell about 8% QoQ to Rs 157 crore from Rs 170 crore last quarter mainly because revenue growth remained subdued and other income decreased due to one-time deferred tax asset write back.

Revenue too grew lazily; it increased less than 1% to Rs 1,301 crore in Q4FY24 as against Rs 1,289.5 crore in Q3FY24. According to JM Financial mutedness was caused by reduction in projects by Vinfast which happens to be their major services client. Management also indicated that there could be some residual draw down from Vinfast account in Q1FY25. Despite these challenges though; operationally speaking performance remained steady with EBITDA margin staying at around 18.4% in Q4.

Going forward constant currency revenue growth estimates for Tata Tech’s services segment have been revised downwards by JM Financial to 11%-15% for FY25-26 due to continued decline in Vinfast account and slightly weaker than expected performance; brokerage also lowered its margin assumptions for FY25/26 factoring flat-ish outlook provided by management.

However, they still remain positive on future prospects of Tata Tech given wider range of growth opportunities vis-a-vis previous years now available thanks largely diversification achieved so far but notwithstanding troubles associated with Vinfast account which according them will be offset by deals with BMW aerospace education sectors among others keeping momentum alive.