The brokerage called Q1 a “mixed print”, with a beat on revenue but miss on margins. It mentioned that deal closures and ramp-ups improved between April and June, and expects this trend to continue in Q2 as clients resume R&D spends after a pause.
Goldman Sachs also has a ‘Sell’ call on Tata Tech, with a target price of ₹560.The brokerage termed Q1FY26 performance as in line, with revenue and EBITDA 1% above and 7% below estimates, respectively.
EBITDA margin contracted 80 basis points vs estimates, hurt by weak revenue in the core services business (-5.3% QoQ CC), which triggered negative operating leverage.
Management, however, expects a sequential pickup in Q2, citing improved customer engagement and new deal wins in June after muted activity in April and May. It added that this guidance is not contingent on tariff resolution.
Citi has a ‘Sell’ rating with a target price of ₹450. It said that services revenue fell 7.6% QoQ and 6.3% YoY in constant currency, which was in line but disappointing.
The weakness was led by the automotive segment, including key anchor clients and the industrial & heavy machinery (IHM) vertical, while aerospace was the lone bright spot.
Citi highlighted a sharp EBIT margin decline, primarily due to revenue shortfall, partially offset by aggressive SG&A cost cuts. It forecasts a 5% revenue decline in FY26E and cut EPS estimates for FY26-28 by 4-5%.
ICICI Securities, meanwhile, maintained a ‘Sell’ rating but raised its target price to ₹510 from ₹480, citing a revenue beat and strong growth in technology solutions.
It said aerospace continues to drive growth momentum, and management expects recovery from Q2FY26, supported by a healthy Q1 order book.
ICICI raised FY26 EPS estimates by 0.6% and tweaked FY27–28 estimates to factor in sustained growth in technology solutions. However, it flagged key risks such as a sharp profit ramp-up in the BMW JV and strong traction in aerospace, industrial, and heavy machinery segments.
Tata Tech reported a 4.6% sequential revenue decline in constant currency (CC) terms, better than the 6.4% fall feared by analysts. However, margins narrowed and came in below estimates.
Despite the softness in topline and profitability, management remains optimistic about the second half of the year, citing that the deal pipeline today is more robust than it was a year ago.
The services business declined 7.6% in CC terms and 4.7% in US dollar terms.
Out of the 17 analysts tracking Tata Technologies, 12 have a ‘Sell’ recommendation, three say ‘Hold’, and only two rate it a ‘Buy’.
Shares of Tata Technologies Ltd. ended 0.72% higher on Monday at ₹713.90. The stock is down nearly 50% from its post-listing high of ₹1,400, though it still trades slightly above its IPO price of ₹500.
