Tata Tech expects return to healthy growth by Q2 FY26: CEO Warren Harris

Business Standard

18-05-2025

Global product engineering and digital services firm Tata Technologies Ltd expects its return to healthy growth by the second quarter of this fiscal anticipating bilateral trade pacts between the US and its trade partners and the emergence of clarity after President Donald Trump's tariff shock, its CEO and Managing Director Warren Harris said.
Having grappled with softness in the market over the last 12 months, he told PTI that the company was entering the new fiscal year "relatively bullish" before Trump's "tariff shock" prompted its customers to once again revisit their plans.
"A lot of those customers towards the end of the (last) fiscal year were starting to get clarity, were starting to put programme decisions and we were very much encouraged by the interactions we had with many of our customers. We were relatively bullish coming into April," he said.
Harris further said, "But unfortunately, almost within the first week of the new fiscal year the new (US) president announced the tariff shock which has really prompted everybody once again to revisit their plans." On the positive side, he said the tariff threats are not going to be realised and trade agreements are likely to be reached.
"What we anticipate is that as soon as there is clarity, given the build-up of demand for new product investments, we think we will see a return to healthy growth as early as the second quarter. The first quarter is going to be impacted by the announcement and the fact that negotiations will continue between the US and its different partners," he noted.
Stating that the company anticipates some breakthroughs in May and June in the US trade negotiations, he said, "That will prepare the way for our customers to return to product investment decisions." He noted that over the last 12 months, the company had grappled with the softness in the market.
"A lot of customers had not made product investment decisions because they were not quite sure where the elections were going to go in the United States and they were not quite sure what propulsion system of choice was going to be adopted in Europe," Harris said.
In the fourth quarter FY25, he said there were tough economic conditions due to headwinds associated with tariff uncertainty and also the lack of regulatory clarity in Europe.
"We were up against a lot of customers that were delaying decision-making and were in some respect not ramping up in the way that we wanted," Harris noted.
When asked about the company's order books, he said, "Last year, we had the mega deal with BMW. We have had USD 50 million dollar deal and we had several USD 20-plus million dollar deals." He further said, "Our order book is relatively healthy and that was one of the reasons we were confident coming into this fiscal year and we were looking to put FY25 behind us but unfortunately we have had this shock of tariffs and that is going to play out in the next couple of months." Yet, he said, "We do really believe that given the order book that we have got, given the fact that our customers have to start investing in new products soon, we anticipate that Q2 will certainly be better than the first quarter and we will see growth from there.