On May 6, trade in Tata Technologies' shares fell 5% after investors were let down by the company's unimpressive January–March quarter results.

Shares of Tata Technologies were trading on the NSE at Rs 1,041.80 a share at 09.55 am.

In comparison to Rs 170 crore a quarter earlier, the company's net profit for the March quarter decreased by almost 8% on a sequential basis to Rs 157 crore. Reduced other income as a result of a one-time deferred tax asset write-back and limited revenue growth were the main causes of the impact on the bottom line.

Additionally, revenue increased at a slow rate of less than 1%, from Rs 1,289.5 crore in Q3FY24 to Rs 1,301 crore in Q4FY24. JM Financial blamed the lackluster revenue increase on Vinfast, the company's largest services client, slowing down on a project. Additionally, the management stated that there will be some residual drawdown in the Vinfast account in Q1FY25.

Additionally, operational performance did not change throughout the quarter, with Q4's EBITDA margin coming in at 18.4%.

For FY25–26, JM Financial has lowered its constant currency revenue growth projections for Tata Tech's services business to 11%–15%. "A little weaker exit than previously anticipated and Vinfast's residual fall in Q1 account for the reduction in FY25E growth. In order to account for the management's pessimistic view, we have also reduced our FY25/26 margin assumptions by 60 basis points apiece," the brokerage said.

However, due to its large part to its varied portfolio, JM Financial believes that Tata Tech has more growth engines currently than it had a few years ago. The brokerage believes that despite the decline in the Vinfast account, the transactions in aerospace, education, and BMW should help maintain the underlying growth for Tata Tech.