Tata Tech IPO Notes

Tata Technologies
Play on the fast-growing ER&D market

Information Technology  IPO Note  November 19, 2023
Tata Technologies (Tata Tech) is a leading global engineering services

Issue Details
company that offers product development and digital solutions (including
turnkey solutions) to global OEMs and their tier-1 suppliers. The company’s Price Band (Rs/sh) 475-500
offerings focus on manufacturing-led verticals – Automotive (75% of the 30 shares and its
revenue), Aerospace, and transportation and construction heavy machinery Bid Lot
multiples thereof
(TCHM). Its areas of expertise include product engineering and manufacturing
engineering in the mechanical domain (such as body engineering), while it is Face Value (Rs) 2
adding capabilities in the software and embedded engineering segments. The Issue Opens 22-Nov-2023
IPO is completely an offer of sale (OFS) of 60.85mn shares. Tata Tech’s growth Issue Closes 24-Nov-2023
trajectory over FY16-23 remains slower than peers’, but has seen improvement
Issue Size (mn shares) 60.85
in the last three years because of traction in select accounts. Weakness in a
large client in H1FY24 due to near completion of the large full-vehicle Issue Size (Rs bn) 28.9-30.4
development projects may weigh on the company’s near-term performance Shares o/s pre-issue (mn) 405.67
which, in our view, is adequately captured in the IPO valuations. At the upper Shares o/s post-issue (mn) 405.67
end of the price band, Tata Tech is being valued at ~32x its FY23 EPS vs. peers’ Post issue market cap
such as LTTS (~40x its FY23 EPS), Tata Elxsi (~69x its FY23 EPS), KPIT (~110x (Rs bn) 192.7-202.8
its FY23 EPS), and CYL (~37x its FY23 EPS).
Financial Snapshot (Consolidated) Issue Structure
Y/E March (Rs mn) FY20 FY21 FY22 FY23 H1FY24 QIBs 50%
Revenue 28,521 23,809 35,296 44,142 25,267 Non-Institutional Category 15%
EBIT 3,712 2,935 5,599 7,264 4,150 Retail 35%
PAT 2,515 2,392 4,370 6,240 3,519 *employee reservation portion:
Adj. EPS (Rs) 6.0 5.7 10.5 15.4 8.7 2.02mn shares; TML shareholders
EBITM (%) 13.0% 12.3% 15.9% 16.5% 16.4% reservation portion: 6.08mn shares
Revenue growth (%) -4.3% -20.0% 47.3% 15.7% 33.8%
Adj. EPS growth (%) -28.2% -4.9% 82.7% 47.2% 35.7% Objects of the issue
RoE (%) 13.9% 12.0% 19.8% 23.7% 26.4% a) Offer for sale of 60.85 mn shares
RoCE (%) 13.4% 11.2% 18.5% 22.2% 24.7%
Selling shareholders:
Source: RHP, Emkay Research
TML: 46.27mn shares
Alpha TC Holdings: 9.72mn shares
Large exposure to the automotive vertical offers strong headroom for growth
Tata Capital Growth Fund I: 4.86mn
Tata Tech caters to the automotive vertical—the second-largest in terms of global R&D shares
spend (USD180bn in 2022) with third-party outsourcing mix of ~10% (USD17-18bn). A
focal point for Tata Tech is body engineering, constituting ~40% of the total third-party
outsourced spending. Although Tata Tech concentrates its outsourced spending in key Shareholding pattern (%) Post issue
areas, the emerging sectors of hybrid and electric mobility/powertrain and AD-ADAS
align with competitors such as KPIT, TELX, and LTTS. Growing investment in electric
/hybrid vehicles underscores the need for lightweight architecture, a domain in which
Tata Tech with its mechanical expertise would play a significant role. Further,
expenditure on mechanical engineering by OEMs/Tier-1 players is more established and Others,
likely to witness increased outsourcing compared with software-related spending. 28.3%
Tata
OEMs/Tier-1 players tend to retain software-related expenses in-house, as these areas Motors
Limited,
are still evolving and their differentiation lies in the software embedded within the TPG Rise 53.4%
Climate SF,
vehicles. Moreover, there are cross-selling opportunities in the aerospace and TCHM 9.0%
verticals, which typically follow a spending trajectory similar to that of the automotive
Alpha TC
vertical, albeit with a lag. Holdings, 4.9%
Marquee list of clients; reduced dependency on anchor clients to drive Tata Capital Tata Motors
consistent performance Growth Fund I, Finance Limited,
2.4% 2.0%
While Tata Tech’s capabilities were predominantly developed via its association with Tata
Motors and JLR over time, it has successfully expanded presence to other OEMs/Tier-1
players, which include new energy companies like VinFast. The company now serves 35
traditional OEMs/Tier-1 suppliers and 12 new-energy vehicle companies as its
customers. Its major accounts comprise 7 of the top-10 and 12 of the top-20 global
automotive ER&D spenders, and 5 of the 10 prominent new-energy ER&D spenders Dipesh Mehta
globally. It has reduced its dependency on anchor clients (Tata Motors and JLR) to 46.0% dipeshkumar.mehta@emkayglobal.com
+91 22 6612 1253
in H1FY24, from 54.4% in FY20. The company has recently been empaneled by Airbus,
which is expected to become a strong growth avenue, and diversify its revenue base
Ayush Bansal
further.
ayush.bansal@emkayglobal.com
Education services: Untapped upskilling opportunity in India +91 22 6612 1344
There is an increasing need to equip engineers and technical staff with emerging skill-
sets with the advent of Industry 4.0. The need for upskilling is evident, with studies Pulkit Chawla
pulkit.chawla@emkayglobal.com
showing that investment in upskilling could strengthen the country’s economy by
+91 22 6642 4258
USD570bn and generate additional employment of 2-2.5mn by 2030. According to
Zinnov, Tata Tech is currently the only player positioned to address the needs of
educational upgradation in India with its global partner ecosystem and system-
integration capabilities.
Emkay Research is also available on www.emkayglobal.com and Bloomberg EMKAY<GO>Please refer to the last page of the report on Restrictions Refer to Important Disclosures at the end of this report
on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors, Expert Investors or
Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.
Tata Technologies India Equity Research | IPO Note
Industry overview
ER&D services are a set of services offered to enterprises on activities that involve the process
of designing and developing a device, equipment, assembly, platform, or application such that
it may be produced as a product for sale through software development or a manufacturing
process. Players in the ER&D services industry typically focus on the design, development,
testing, rollout, and maintenance aspects of the product and process development chain, and
not on mass manufacturing.
The ER&D services market comprises product engineering services and process engineering
services. Product engineering services commonly address the product development lifecycle
for companies, while process engineering services involve services to assist in the production
of facilities and processes that produce value-added outputs and components through plant
design engineering, manufacturing engineering, industrial engineering, and process-control
systems.
Exhibit 1: ER&D services provided across various industry verticals
Verticals
Manufacturing Hi-tech Services
Industrial & Pharma & FMCG Healthcare
Aerospace Energy & Software Consumer Media &
Service lines Automotive Heavy Medical Semiconductor Telecom & Payers & BFSI
& Defense Utilities & Internet Electronics Entertainment
Machinery devices Retail Providers
Mechanical/Elect
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
rical engineering
Embedded
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
engineering
Manufacturing
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
engineering
Plant
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
engineering
Software
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
engineering
Global ER&D services spending is expected to register a 10% CAGR over CY22-CY26E
In 2022, ER&D spending continued its upward trend as enterprises, committed to sustaining
innovation while funding it through cost optimization and productivity improvements, have
maintained their focus on future-proofing and transformation, with an intensified emphasis on
digital engineering. The engineering services and technology solutions industries are
characterized by rapid technological changes, evolving industry standards, changing client
preferences, and new product and service introductions. For 2021, the global ER&D spend is
estimated at USD1.8trn, of which USD810bn was attributed to digital engineering spend.
Despite macro headwinds such as the extended geopolitical situation, continued high inflation,
and expected recession, ER&D spending is expected to stay resilient and continue to grow
steadily. The digital engineering spend mainly comprises spending on new-age technologies
like IOT, blockchain, 5G, AR/VR, cloud engineering, digital thread initiatives, advanced
analytics, embedded engineering, and AI/ML. Further, the digital engineering spend is expected
to post a CAGR of ~16% from CY22 to CY26.
Global ER&D spend is highly consolidated with Z1000 enterprises (defined as the top 1000
global ER&D spenders across more than 20 verticals by Zinnov), which account for ~85% of
the overall ER&D market.
Manufacturing-led verticals have been the largest contributors and account for almost half of
the global ER&D spending. In terms of expenditure, the automotive sector is the largest
manufacturing ER&D vertical, and the second largest ER&D vertical overall, accounting for
~10% of global ER&D spend for 2022. Hi Tech-led verticals currently account for ~40% of the
global ER&D spend. Software and internet is the largest ER&D vertical, accounting for ~20%
of the global ER&D spend and is among the fastest-growing verticals. Services-led verticals
account for ~12% of global ER&D spend, primarily driven by digital engineering investments.
Though this vertical makes up the smallest portion of the ER&D spend pie, it is the fastest-
growing category.
Among geographies, North America has the highest share of global ER&D spend and is expected
to grow the fastest due to the higher penetration of software and internet firms in the region.
Emkay Research is also available on www.emkayglobal.com and Bloomberg EMKAY<GO>.Please refer to the last page of the report on Restrictions on Distribution. In Singapore, this research report or research
analyses may only be distributed to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.
November 19, 2023 |2
The APAC region led by increased ER&D spending by Southeast Asian enterprises and high
digital engineering spend from hi-tech enterprises is expected to overtake Western Europe.
China accounts for more than a tenth of the global ER&D spending, with automotive,
semiconductor, and software and internet accounting for ~50% of the region’s spend. China is
also the largest market for battery EVs, with companies like BYD and Nio continuously
increasing their R&D expenditure.
Exhibit 2: Global ER&D services spend is expected to post a CAGR of 10% over CY22-26E
Global ER&D Services Spend (USDbn)
3,000 2,672
2,500
2,000 1,811
1,648
1,466 1,504
1,500
1,000
500
-
2019 2020 2021 2022 2026E
Exhibit 3: Digital engineering spend is expected to register a ~16% CAGR over CY22-26E
Digital engineering spend Legacy ER&D spend
2,500
2,000
1,026
1,500 995
982
1,000 997 959
962
1,278
500 1,038
469 545 653
393
-
CY18 CY19 CY20 CY21 CY25E - CY25E -
Optimistic Conservative
Exhibit 4: Share of digital engineering spend is expected to be ~50% by CY25
Digital eng. Spend share (%)
55% - Optimistic
60%
50%
40%
36% 51% -
40% 32% Conservative
29%
30%
20%
10%
0%
CY18 CY19 CY20 CY21 CY25E
Exhibit 5: Key difference between IT and ER&D services model – Significant headroom for the ER&D industry to deliver stronger growth
compared with IT services
Particular IT Services ER&D Services

1) Application services; 2) 1) Product development (Mechanical, Embedded, Software); 2) Product sustenance and
Key service lines
Infrastructure services support; 3) Manufacturing engineering, MRO and network engineering
Strategic Activities involving cost reduction
High trust, mission-critical, revenue-generating partnership
partnerships and integration
Deal structure and Long duration with T&M or fixed- Mid to long-term strategic partnerships; Discrete work packages often involving integration
size price engagement models with client teams
15% of the global IT spend is
Growth headroom Only 5.5% of the global ER&D spend is currently outsourced
currently outsourced
C-suite CIO – Often low involvement,
CTO/Product owners/Head of Engineering with often Day 0 involvement
relationship brought in later in the process
Global delivery model, competitive
Win factors Knowledge assets (IP/Solutions), R&D infrastructure, data protection, specialized talent
rates
Barriers to entry More replaceable, rate-card focused Deeply embedded projects with specific skillsets, high switching cost
Exhibit 6: ER&D spend of the top 1,000 enterprises in 2022
Spend contribution
Others, 15%
Top 100, 48%

Remaining 800 of
top Z1000, 26%
Next 100, 11%
Exhibit 7: ER&D spends (USD bn) across industry verticals in 2022
ER&D Spend (USD bn)

Manufacturing Hi-tech Services
370
400
300
180
200 113 102 98
78 52 51 48
100
0
Electronics
Software &
Healthcare
Automotive
Industrials
Semiconductor
BFSI
Aerospance &
Retail
Consumer
Internet
Defense
Exhibit 8: Manufacturing-led vertical contributed ~48% to ER&D spend in 2022
% contribution to overall ER&D spend

Services-led
verticals, 12%
Manufacturing-led
verticals, 48%
Hi-tech-led
verticals, 40%
Exhibit 9: ER&D spend (USD bn) across geographic regions
2020 2021 2022 2026E
1,600 1,459
1,400
1,200
1,000 903
804
715
800 616
573
600 393 417 443 447
380 411
400
200
-
North America Western Europe APAC
Exhibit 10: Industry-wise ER&D spend and intensity
CAGR
USD bn CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21
(%)
Top 2500 R&D spend 538 607 696 742 736 823 904 909 1,094 9.3%
Revenue 16,723 17,973 17,687 17,910 18,448 20,352 21,018 18,952 23,090 4.1%
R&D as a % of revenue 3.2% 3.4% 3.9% 4.1% 4.0% 4.0% 4.3% 4.8% 4.7%
Top 5 industries’ R&D spend 359 409 483 520 525 591 651 658 797 10.5%
Pharmaceuticals & Biotech. 97 110 132 144 139 154 167 171 213 10.3%
Software & Computer Services 51 63 79 88 94 118 143 154 200 18.7%
Technology Hardware & Equip. 87 95 111 120 117 128 140 140 164 8.3%
Automobiles & Parts 84 95 108 114 117 128 133 125 138 6.4%
Electronic & Electrical Equip. 41 46 52 53 57 64 69 68 83 9.0%
Top 5 industries’ revenue 5,184 5,767 6,397 6,862 7,141 7,567 7,925 7,482 9,144 7.4%
Pharmaceuticals & Biotechnology 669 755 844 953 912 968 1,049 1,029 1,292 8.6%
Software & Computer Services 489 627 725 814 1,117 1,086 1,213 1,245 1,605 16.0%
Technology Hardware & Equipment 1,085 1,180 1,271 1,377 1,348 1,522 1,557 1,544 1,940 7.5%
Automobiles & Parts 1,978 2,172 2,465 2,588 2,590 2,708 2,754 2,412 2,713 4.0%
Electronic & Electrical Equipment 961 1,034 1,092 1,129 1,174 1,282 1,352 1,252 1,595 6.5%
Top 5 industries’ R&D spend as a

6.9% 7.1% 7.5% 7.6% 7.3% 7.8% 8.2% 8.8% 8.7%
% of revenue
Pharmaceuticals & Biotechnology 14.5% 14.6% 15.7% 15.1% 15.2% 15.9% 15.9% 16.6% 16.5%
Software & Computer Services 10.4% 10.1% 10.9% 10.8% 8.4% 10.8% 11.8% 12.4% 12.5%
Technology Hardware & Equipment 8.0% 8.0% 8.7% 8.7% 8.7% 8.4% 9.0% 9.1% 8.5%
Automobiles & Parts 4.2% 4.4% 4.4% 4.4% 4.5% 4.7% 4.8% 5.2% 5.1%
Electronic & Electrical Equipment 4.3% 4.5% 4.8% 4.7% 4.9% 5.0% 5.1% 5.4% 5.2%
Source: European Commission, Emkay Research
Exhibit 11: Key characteristics of service providers across different geographies
India Eastern Europe Western Europe North America

Total spend in 2022
25 8 37 16
(USD bn)
Large onshore
Large IT services companies and Focused on software Large key vertical-focused
Characteristics staffing
pure-play ER&D services engineering and ISV clients service providers
organizations
Aerospace,
Software/Internet, Telecom, Automotive, Aerospace, Automotive,
Focus verticals Diversified
Automotive Energy Software,
Telecom
Alten, Bertrandt, Allegis, Belcan,
Key players HCL, LTTS, TCS, Tata Tech DXC, EPAM Softserve
Capgemini, Tieto CDI
Nearshore outsourcing for Local Europe customers
North American and European Local R&D units of
Customer segments European companies as well as meeting onshore needs
end-markets large companies
U.S. companies and staffing requirements
Availability of next-generation
digital talent pool; Annual Emergence as a strong
graduate STEM talent pool of nearshore presence due to the Onshore presence for Vibrant tech
Advantages ~2.14mn, providing an existence of skilled workforce; manufacturing heavy start-up
opportunity to scale; Attractive Favorable ecosystem and costs verticals ecosystem
billing rates when compared with to build scalable teams
peers from other nations
Avg. billing rates
35K-45K 60K-70K 90K-110K 90K-110K
(USD/FTE/year)
Key growth drivers in ER&D spending
a) Focus on sustainability: Global enterprises have clearly defined timelines and targets to
incorporate carbon net zero and/or carbon neutrality as sustainability is gaining an increasingly
important role in developmental plans. This has led to an enhanced focus on energy-efficient
product design and clean energy transition for operations across industries. Countries across
the globe are announcing plans to phase out internal combustion engine (ICE) powered
vehicles, with electrification-powered modes of transport expected to replace them. Across
industries, electrification is expected to be at the core of sustainable decarbonization, offering
the most effective way to cut carbon dioxide emissions from end-use sectors such as heating
and cooling, transport, and industrial applications.
b) Shrinking innovation cycles: As consumers evolve, the market is forced to produce more
innovative products to meet their demands at a faster pace. This has led to shortened product
lifespans and rapidly shrinking product-innovation cycles. From 2022 to 2026, automakers are
projected to introduce an annual average of 61 new models, which is 50% more than the
average number of new models introduced in the preceding two decades.
c) Digital thread: Digital technologies are changing the way the manufacturing sector is
developing, building, and servicing products around the globe. These technologies create value
by connecting machines through a ‘Digital Thread’ across the value chain — making it possible
to generate, securely organize, and draw insights from disparate sources of data. Product
lifecycle management (PLM), manufacturing execution systems (MES), and enterprise resource
planning (ERP) solutions are the fundamental aspects of product realization. The cornerstone
of any ‘Digital Thread’ is strong digital integration across the digital foundation of any
manufacturing enterprise, which includes PLM, ERP, and MES. Additionally, challenges faced in
manufacturing operations such as the lack of collaboration between complex and scattered
infrastructure, lack of flexibility due to individual dependency on separate platforms, restrained
decision-making due to the lack of integration between channels, and restricted data visibility
due to the lack of centralized monitoring platforms and high costs of connectors are further
driving the need for integration. This IT/OT convergence enables real-time manufacturing
insights about a product’s performance and use – from design to production, sale, use, and
disposal. Accordingly, many large manufacturing firms are increasing their focus on factory
automation by leveraging the Industry 4.0 technology stack. The need for ‘Digital Thread’ is
further accentuated by macro factors like supply chain disruptions, capital re-allocation needs
owing to demand swings, reconfiguration of management and manufacturing flows due to
remote work, and increasing focus on the environmental impact of manufacturing.
d) Growing product complexity: Technology advancements are accelerating at a rapid pace

across industries, leading to an increasing level of product complexity – from the development
phase to aftermarket support. For example, in the automotive industry, digital technologies
have percolated across the value chain in the wake of changing consumer patterns. Connected
experiences, for instance, have replaced driving experience as a car-maker’s primary source
of competitive advantage. Car-makers are also investing in digitizing their sales and services
operations while offering a range of add-on services such as battery-as-a-service (BaaS) and
over-the-air updates.
e) Advent of Generative AI: The rise of GenAI is spurring a wave of fresh investments as
companies aim to enhance engineering efficiency and pioneer intelligent products and services.
While still in its infancy, GenAI carries a transformative potential and is ready to reshape
industries. This surge in innovation is fueled by increased funding, paving the way for numerous
cutting-edge applications. This technology is on the verge of transforming business operations
and products, heralding a new era of innovation and efficiency.
ER&D spend outsourced to third-party ESPs
Industry trends and technological advancements are transforming the way companies develop
and manage products as well as their ability to provide engaging user experiences, leading to
changes in business models, operations, and supply chains. As the pace of innovation
accelerates, enterprises across industries are turning to trusted third-party engineering
services providers (ESP) for support. These service providers with comprehensive end-to-end
capabilities help enterprises upgrade and service existing products and processes, as well as
develop new products and processes to better compete and drive competitive differentiation.
Technological advancements and the pace of innovations in areas of cloud, 5G, AI/ML,
traditional/established and new-energy enterprises are leveraging the ESP ecosystem. The
demand from traditional enterprises is primarily focused on addressing capacity requirements
as they look to balance their R&D investments between traditional and new products and
services. As enterprises focus on building new core capabilities, they carve out traditional
products through end-to-end relationships with service providers. Verification and validation,
product sustenance, and end-of-life management offer the highest outsourcing opportunities.
At the same time, new-energy enterprises require capacity and experience across domain areas
and are open to leveraging the ESP ecosystem for ER&D outsourcing initiatives.
The key growth drivers for increased outsourcing opportunities include –
 Cost savings: Driven by cost reduction and product lifecycle pressures, OEMs are
increasingly focused on developing effective outsourcing strategies that drive significant
improvement in global engineering and ER&D operations. At the same time, they also look
to leverage cost-arbitrage benefits from ESPs based out of low-cost countries like India and
Romania.
 Need for skilled talent: Rapid innovation and the emergence of new-age technologies and
processes are transforming the way products are designed, manufactured, and serviced.
Increasing focus on sustainability, embedded and digital engineering, Digital Thread and
factory automation has made new product development dynamic and more challenging. The
shortage of skilled talent in these domains has accelerated the adoption of outsourcing to
third-party ESPs by multiple large manufacturing firms.
 Shortening product development timelines: Rapid advancement of technology and faster

innovation have translated to a drastic reduction in product development timelines. This
increases the need for partnerships with experienced third-party ESPs with end-to-end
capabilities in traditional as well as new-age products.
 Faster time to market: To realize faster time-to-market, enterprises are increasingly relying
on the presence of a skilled workforce, which is geographically diversified to ensure round-
the-clock product innovation and development.
Global Automotive ER&D market
The global automotive ER&D spend currently stands at USD180bn and is the largest contributor
among manufacturing verticals, amounting to ~10% of the overall ER&D spend. It is estimated
to register a ~7% CAGR to USD238bn by 2026. This spend is highly concentrated among the
top 20 companies, accounting for ~73% of the global spend. Digital engineering spend in 2022
amounted to USD46bn and is expected to register a ~16% CAGR to USD85bn by 2026. Digital
engineering comprises ADAS, infotainment, telematics and connected, cloud engineering,
Digital Thread initiatives, hybrid and electric, embedded engineering, digital manufacturing,
and digital twin-powered body design among others. In the past, companies in automobile
manufacturing have rationalized their R&D budgets due to unfavorable macroeconomic and
production trends to reduce their costs; but given the strategic nature of product development,
OEMs continue to invest in product development even in recessionary environments.
Exhibit 12: Automotive ER&D spend is expected to post a 7% CAGR over 2022-26E
Automotive ER&D spend (USDbn)

238
250
200 180
167
155
150
100
50
0
2020 2021 2022 2026E
As demand for autonomous and connected technologies grows due to increasing pressure from
regulations on passenger safety and cost pressures on OEMs, the company will continue to
connected and autonomous technologies. As the shift to meeting carbon targets intensifies,
electrification is expected to be the top focus area for the automotive industry. Global
automakers plan to spend an estimated USD1.2trn through 2030 to develop and build EVs and
shift away from combustion engines. Additional growth drivers include a heightened focus on
smart manufacturing, connecting the digital thread and enhanced customer experience.
Key trends driving ER&D spend in the automotive industry
Global automotive players are ramping up R&D investments across the broader theme of ACES
being, autonomous, connected, electrification and shared mobility. This is further enabled by
the transition to alternative propulsion systems – especially for EVs. As new technologies
disrupt the automotive sector, ER&D complexity has increased, requiring specialized support.
The focus of the automotive industry has been shifting from R&D lean manufacturing, fuel
efficiency, material science, basic infotainment to electrification, fully autonomous, smart
infotainment, automated production, and Factory 4.0.
Autonomous: Automotive players are keen to provide advanced safety and autonomous
driving with environmental sensor technologies. This includes AI/ML to provide enhanced levels
of vehicle motion control.
Connected: OEMs are looking to create connected vehicles that can communicate bi-
directionally with other systems outside of the car. The connectivity in a vehicle enables
infotainment, safety, roadside assistance, diagnostics efficiency, navigation, and payments.
Connectivity is among the prime differentiators for passenger vehicles.
Electrification: Electrification is expected to be the top focus for the automotive industry as
the sale of EVs has increased by more than 55% annually in 2022 vs. 2021 (more than doubled
in 2021 vs. 2020) and the focus on meeting carbon targets has intensified. Further,
incentivization policies by governments across the globe are accelerating the transition towards
EVs.
Shared mobility: The sharing of transportation services and resources among users has
gained importance over the last few years with growth of the mobility industry.
Exhibit 13: ER&D spend (as a % of sales) of top automotive companies
VOLKSWAGEN MERCEDES-BENZ TOYOTA MOTOR GENERAL MOTORS
BMW FORD MOTOR HONDA MOTOR ROBERT BOSCH

12%
10%
8%
6%
4%
2%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: European commission, Emkay Research
Automotive outsourced ER&D market
The automotive outsourced ER&D market is pegged at USD18-20bn in 2022 (~20% of the
overall outsourced spend) and is expected to grow at a faster rate than overall automotive
ER&D spending during 2022-2026.
With the increasing adoption of digitalization and high requirements for technology-enabled
skills in the automotive industry, a lack of skilled workforce is expected to drive the outsourcing
opportunity to plug the growing skills gap. This is expected to translate into an opportunity
with the expertise of ESPs and their ability to build scalable engineering teams crucial for
automotive enterprises with supply-side constraints plaguing automakers.
As companies focus on ACES initiatives, they seek to outsource body engineering segments
completely to third-party service providers. Further, body engineering presents the largest
opportunity for ESPs, accounting for more than 40% of the outsourced spend. Further, hybrid
and electric mobility are expected to be the fastest growing sub-segments in the outsourced
market, with enterprises looking to work with ESPs with full-body EV capabilities.
Traditional OEMs typically look to have increased autonomy over the product development
process for new models as it is core to the enterprise. However, once the first model is out,
the propensity to outsource work to the ESP ecosystem is higher. At the same time, multiple
new-age OEMs (for example – Canoo, VinFast, Fisker, Li Auto, Nikola, NIO, and Rivian) have
collaborated with and outsourced work to ESPs for new products as they focus on reducing
product development time and cost.
Exhibit 14: Automotive outsourced ER&D market (USD bn) in 2022
ADAS &
Autonomous, 9.3%
Body engineering,
Hybrid & Electric
40.0%
mobility, 18.7%
Infotainment &
Connected, 18.7%
Traditional
Safety Systems,
powertrain, 5.3%
8.0%
Aerospace and Defense
The aerospace sector is experiencing a notable resurgence following the challenges posed by
the COVID-19 pandemic. With air travel gradually rebounding and global demand for aviation
services increasing, aerospace companies are reinvigorating their R&D efforts. According to
Zinnov, ER&D spend for the aerospace and defense industry for the year 2022 stood at
USD52bn and is estimated to grow by USD10bn to reach USD62bn in 2026. Currently, the
highest spend comes from Europe, accounting for ~48% of the overall spend, followed by North
America. France is a key geography, accounting for more than 20% of the overall ER&D spend
in this industry. The top 10 aerospace ER&D spenders account for more than 65% of the overall
spending of the industry.
The aerospace outsourced ER&D market stood at USD9-10bn for 2022, with service providers
being leveraged across the value chain. The outsourced ER&D opportunity for this industry is
estimated to be over USD8bn by 2025.
Growth in ER&D spend is driven by several factors. Post-COVID, there is a renewed focus on
R&D within the industry, as companies seek to innovate in areas such as digitalization,
sustainability, and improving manufacturing throughout to meet increased demand. The
pandemic has led to a shift in focus towards narrow-body aircraft, as well as an increase in the
demand for air cargo and passenger-to-freighter conversions. The MRO segment was impacted
by plummeting passenger demand, but the overall outlook is positive as passenger air travel
recovers.
Aerospace enterprises are focusing on digitalization to reduce costs, including shop-floor

intelligence, smart supply chain, and predictive maintenance. Digital technologies are finding
use cases all the way from asset tracking and inventory management to digital MRO, and the
ER&D service provider ecosystem is being leveraged for digital thread enablement.
Aerospace tends to follow innovation in the automotive vertical. There is a growing interest in
the use of hybrid and electric propulsion systems in the aviation industry, as advances in
electric car technology have led to improvements in batteries, electric motors, and other
hardware. Key aircraft and component manufacturers (for instance, Airbus, Boeing, GE, and
Pratt & Whitney) have recently announced capacity expansion plans and new manufacturing
plants to address aircraft backlog and meet customer requirements.
Transportation and Construction Heavy Machinery (TCHM)
The global TCHM ER&D spend was pegged at USD43bn in 2022 and is estimated to grow to
USD49bn by 2026. The TCHM service provider outsourced ER&D market is currently pegged at
USD2.5-3.0bn and is expected to grow to USD3.5-4.0bn by 2026. Mechanical design and
manufacturing engineering are the key outsourced sub-segments of the TCHM industry.
November 19, 2023 |10
The TCHM industry is investing in various digital engineering initiatives to improve asset
utilization and optimize performance. Key focus areas include smart factories, electrification,
and connected equipment. While TCHM industry lags behind the automotive sector in
innovation by 3-5 years, it has similar regulatory, engineering and technology challenges,
which will accelerate the demand for outsourced engineering services. Key trends for the
industry’s future include electrification, autonomous fleet, connected equipment, and reduced
carbon footprint. OEMs are also looking to increase revenue and bring new products to market
faster, reduce costs, improve customer experience, and rapidly scale up production and
accelerate product development. The COVID-19 pandemic has resulted in rapid adoption of
digitalization initiatives by off-highway and heavy engagement equipment OEMs as well as with
digital connectedness and performance optimization emerging as key use cases.
Education services: Untapped upskilling opportunity in India
With the advent of Industry 4.0, there is an increasing need to equip engineers and technical
staff with emerging skillsets. Studies by the World Economic Forum (WEF) in 2021 indicated
that 92% of the companies surveyed wished to reskill their employees. Although India has a
robust talent supply, the need for skill development is imminent. This requires upskilling on a
national scale, especially in the fields of engineering and technology. The need for upskilling is
evident with studies showing that investments in upskilling could strengthen the country’s
economy by USD570bn and generate additional employment of 2.0-2.5mn by 2030.
The demand-supply gap in tech talent is a global phenomenon. The current gap in India entails
a huge opportunity to upskill the current supply of engineers and technical staff to meet future
demand. According to an analysis by NASSCOM and Draup, there is a need to upskill nearly
1.4-1.9mn engineers to meet the demand in 2026.
According to Zinnov, Tata Tech is currently the only player positioned to address the needs of
educational upgradation in India with its global partner ecosystem and system integration
capabilities.
Increased manufacturing focus on education and upskilling
Rapid industry transformation and increased focus on new-age technologies, including ER&D
and accelerated digital transformation, have increased the demand for digital talent. According
to the Labour Bureau’s Employment Economic Survey Q2 2021, ~18% organizations in the
nine major sectors were imparting formal skill training in India. Manufacturing was the fifth-
largest segment where ~17% of the firms in India were practicing this.
With the advent of Industry 4.0, the manufacturing sector is switching to next-gen
technologies, aiding in automation and digitalization. While smart factories with connected
machines (deliver real-time data) can help improve production and supply chain processes,
there exists a significant skill gap in terms of employment. This gap has further widened
because of the disruption taking place in the automotive industry due to ACES technologies.
The Ministry of Skill Development and Entrepreneurship estimates that the EV industry alone
will create employment for 10mn people in the country by 2030. Accordingly, this development
will generate employment for a huge portion of the country’s total skilled workforce.
Exhibit 15: Sector-wise distribution of estimated establishments imparting formal skill training
% of companies imparting formal skill training

29.8%
30%
22.6% 21.1% 20.2%
17.4% 15.5%
20% 13.0% 11.2%
7.1%
10%
0%
Health
IT/BPOs
Education
Manufacturing
Transport
Financial
Trade
Construction
Accommodatio
Services
Restaurants
n&
Source: Company, Emkay Research
November 19, 2023 |11
Government spending: MSDE expects to spend USD318mn in 2023
To address the widening skill gap in India, MSDE spent ~USD289mn in 2021. This spend is
focused on the creation of standardized infrastructure for the delivery of skill development
training equipped to run high-quality industry-driven courses. Further, MSDE has budgeted to
spend nearly USD318mn in 2023 on skill development and infrastructure development.
Currently, there are 14,758 ITIs (government and private), of which ~2,000 have been
upgraded or have plans to upgrade. States across the country have been investing heavily to
upgrade ITIs by collaborating with various industry players to bring in the tools and
technologies needed to set up the infrastructure. To upgrade one ITI, states spend around
Rs300-400mn (USD3.6-4.8mn) on partners who modernize technology infrastructure, provide
industry-oriented courseware, training, and support to help students get better employment
opportunities.
According to Zinnov, Tata Tech is the only player uniquely positioned to address the needs of
educational upgradation in India with its global partner ecosystem and system integration
capabilities.
November 19, 2023 |12
Company overview
Tata Tech is a leading global engineering services company offering product development and
digital solutions, including turnkey solutions, to global OEMs and their tier-1 suppliers. It has
deep domain expertise in the automotive industry and leverages this expertise to serve its
clients in adjacent industries, such as aerospace and TCHM.
The company primarily categorizes its line of business into two segments: i) Services (~79%
of H1FY24 revenue) and Technology Solutions (~21% of H1FY24 revenue). Tata Tech is a pure-
play manufacturing-focused ER&D company, primarily concentrating on the automotive
industry and is currently engaged with 7 out of the top 10 automotive ER&D spenders and 5
out of the 10 prominent new energy ER&D spenders in 2022. As of Sep-23, the company has
19 global delivery centers spread across North America, Europe, and Asia Pacific, with each
center staffed by a majority of local nationals, enabling the company to provide continuous
services.
 Services: The primary business line is services, which includes providing outsourced
engineering services and digital transformation services to global manufacturing clients,
helping them conceive, design, develop and deliver better products.
 Technology solutions: The company complements its service offerings with product and
education businesses. Through this, the company resells third-party software applications,
primary product lifecycle management software and solutions; it also provides value-added
services such as consulting, implementation, systems integration and support. The
education business provides ‘phygital’ (physical and digital) education solutions in
manufacturing skills, including upskilling and reskilling in relation to the latest engineering
and manufacturing technologies to public sector institutions and private institutions and
enterprises through curriculum development and competency center offerings through its
proprietary iGetIT platform.
Zinnov has estimated the global ER&D spend to be ~USD1.81trn as of 2022 and expects it to
grow to ~USD2.67trn by 2026. The ER&D spend outsourced to third-party service providers
reached USD105-110bn in 2022 and is anticipated to generate an 11-13% CAGR between 2022
and 2026. Key growth drivers within the ER&D market, particularly the automotive market,
include an increasing propensity to outsource services (following the Covid-19 pandemic),
increased regulatory interventions for safer and cleaner products, shrinking product innovation
cycles, and next-generation product technologies that underpin autonomous, connected,
electrification and shared (ACES) technologies.
Additional growth drivers include a heightened focus on smart manufacturing, reducing product
development time and cost, connecting the digital thread, and enhancing customer experience.
Typically, the TCHM industry lags behind the automotive industry by 3-5 years, but the demand
for outsourced engineering services is driven by similar regulatory and technological
challenges. While the aerospace industry has been disproportionately impacted by Covid-19,
the sector has shown signs of recovery, largely driven by increased focus on digitalization,
sustainability, and improving manufacturing throughput to meet rising demand.
Exhibit 16: Revenue registered a ~4% CAGR over FY16-FY23
Revenue ($ mn) YoY (%)
600 47.3% 60%

50%
500
27.5% 40%
400 30%
15.7%
20%
300 2.3% 0.0% 0.6% 10%
-4.3%
200 0%
-20.0% -10%
100
408 418 417 420 402 322 474 548 306 -20%
0 -30%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1FY24
November 19, 2023 |13
Exhibit 17: EBITM has been volatile due to change in the business mix
17% 16.4% 16.5% 16.4%

15.9%
15.5%
16%
14.8%
15%
14% 13.0%
13% 12.3%
12%
11%
9.8%
10%
9%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1FY24
Exhibit 18: Total revenue mix (%)
Services segment Technology solutions segment
120%
100%
17.8% 19.6% 24.9% 19.9% 21.3%
80%
60%
40% 82.2% 80.4% 75.1% 80.1% 78.7%
20%
0%
FY20 FY21 FY22 FY23 H1FY24
Exhibit 19: Revenue mix (%) of the services segment
Automotive Others
120%
100%
18.5% 17.8% 14.1% 11.6% 11.4% 12.2%
80%
60%
85.9% 88.4% 88.6% 87.8%
40% 81.5% 82.2%
20%
0%
FY20 FY21 FY22 9MFY23 FY23 H1FY24
Exhibit 20: Revenue mix (%) of the technology solutions segment
Products Education
120%
4.5%
100% 9.1%
80% 28.1%
44.0%
60% 50.8%
56.7%
95.5% 90.9%
40% 71.9%
49.2% 56.4%
20% 43.6%
0%
November 19, 2023 |14
The company has a diversified global client base and derived ~35%, ~27%, ~20% and ~18%
of the H1FY24 revenue from clients in India, Europe, North America and the RoW, respectively.
The strength of its client relationships is evident from the improving net promoter score, where
it is positioned among the top 20 percentile of technology services players and has a ~97%
repeat rate (based on the percentage of revenue attributable to the services segment in a
period generated from existing clients) for FY22 as well as ~98% repeat rate for H1FY24.
Exhibit 21: Tata Tech’s diversified global client base
50% 45.4%
40% 34.3% 34.8%

30.1% 30.0%
30% 24.9% 24.2%
20%
10% 5.6%
0%
India Europe North America Rest of World
The company was incorporated as Core Software Systems Private Limited on August 22, 1994,
and, subsequently, changed its name to Tata Technologies Limited in 2001. In 2005, the
company expanded through the acquisition of INCAT International plc, a global product
solutions and services provider serving the automotive and aerospace industries worldwide.
Post-merger integration, the company began the capabilities incubation phase, building
strategic partnerships with anchor clients and expanding to non-anchor client accounts. In
2013, it acquired Cambric Corporation, adding Romanian delivery centers to the portfolio, and
expanded its industrial machinery engineering capabilities. In 2017, the company acquired
Escenda Engineering AB in Sweden, further expanding its global footprint. During the
diversification phase, it has expanded its client base, building processes for onboarding new
clients and showcasing capabilities as a global engineering services provider.
November 19, 2023 |15
Investment Rationale
Deep expertise in the automotive industry
Tata Tech’s service portfolio for the automotive industry addresses the product development
and enterprise-optimization needs of traditional OEMs and new energy vehicle companies,
together with their associated supply chains.
The company’s automotive ER&D services span the entire automotive value-chain and include
concept design and styling, tear down and benchmarking (TDBM), vehicle architecture, body
engineering, chassis engineering, virtual validation, ePowertrain, electrical and electronics,
connected, manufacturing engineering, test and validation, and vehicle launch. In addition to
this, it also offers turnkey full vehicle development solutions for traditional ICE-powered
vehicles, plug-in hybrids (PHEV), and battery electric vehicles (BEV), which have been
developed over a period of 10 years. Its services extend from concept, detailed design and
development, test and validation to the production launch of the vehicle.
Tata Tech’s automotive domain expertise and deep understanding of client requirements
underpin the approach of helping clients leverage digital technologies to optimize the manner
in which they conceive, develop, manufacture, sell and service new products. Additionally, the
company’s long-standing partnership with anchor clients, including the relationship with JLR
since 2010, provides it with opportunities to cultivate skills and refine its value proposition for
the automotive sector. Specific offerings such as full vehicle proposition and lightweight
structures have been incubated and developed with TML and JLR. Moreover, its work with TML
has helped it to leverage its capability in developing Power of 8 and Amp.IOT platforms and
capabilities in Industry 4.0.
Further, its sizeable portfolio of automotive services provides cross-selling opportunities into
the TCHM and aerospace sectors. For example, the turnkey machine development capabilities
for TCHM have been derived from its full vehicle proposition and its expertise in automotive
tooling design has underpinned its proposition for the aerospace MRO sector.
Differentiated capabilities in new-age automotive trends (EVs, connected and

autonomous)
The company’s end-to-end solutions for EV development, manufacturing, and after-sales

services are designed to help OEMs develop competitive EVs while maintaining a balance
between cost, quality and timelines. Its suite of product engineering solutions includes
outsourced turnkey EV development, product benchmarking, electric vehicle modular platform
(eVMP) for accelerating product development timelines, and its lightweighting framework can
help OEMs develop products within competitive timelines.
The company has a long-standing history of developing EV capabilities since as early as 2010.
In 2012, it unveiled an EV technology demonstrator (eMO) at the North American International
Automotive Show in Detroit. Since then, the company has executed a number of BEV programs
globally, demonstrating end-to-end capabilities to deliver production vehicles. Over the past
decade, it was heavily involved in various aspects of its clients’ journey to electrify its product
portfolio, particularly for the anchor clients.
With increased regulatory focus on sustainability and changing consumer preferences,

electrification is expected to be the primary focus for the automotive industry. New
technologies are disrupting the automotive sector with increased ER&D complexity, requiring
specialized support. Global automotive companies are increasing their R&D investments across
the broader theme of ‘ACES’ technologies – autonomous, connected, electrification and shared.
The shift to alternative propulsion systems and specifically EVs has enabled this transformation.
Tata Tech offers a one-stop platform for automotive OEMs to meet new engineering needs
across the value chain.
Tata Tech’s expertise in a lightweight body structure (a requirement for all EVs) has been
established through its long-standing partnership with JLR, one of the earliest adopters of
aluminum and lightweight steel. The company’s growing reputation in the lightweight body
structure domain has strengthened its client relationships with established OEMs, leading to
new client acquisitions with new energy vehicle companies across the world.
In addition, partnerships with new energy vehicle companies have provided further
opportunities outside of the traditional strength in body engineering. The company has
November 19, 2023 |16
architectures, over-the-air (OTA) connected services, level 2 and level 3 ADAS, embedded
electronics, EV system design, embedded solutions, computer aided engineering (CAE), vehicle
engineering and integration, prototype build and test, and program management.
Through eVMP, the company helps in reducing vehicle development timelines by offering a
scalable and flexible option for both traditional OEMs and new energy vehicle companies
without a BEV platform. The eVMP platform helps in faster compatibility checks to support
multiple system selections, achieves a higher degree of uniformity, scalability and de-risking
through virtual validation, and allows for rapid configuration changes to client dimensions. Case
in point is the eVMP platform helped accelerate the development timeline for VinFast, a
Southeast Asian EV OEM.
Exhibit 22: Global automotive companies are increasing their R&D intensity (as a % of sales)
VOLKSWAGEN MERCEDES-BENZ TOYOTA MOTOR GENERAL MOTORS
BMW FORD MOTOR HONDA MOTOR
8%
7%
6%
5%
4%
3%
2%
1%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: European commission, Emkay Research
Strong digital capabilities supported by proprietary accelerators
The portfolio of digital services and accelerators is designed to help OEMs and tier-1 suppliers
manage the entire digital product life cycle and engage the customer throughout the product
journey. The solutions leverage the deep manufacturing domain knowledge and intimate
understanding of clients. Solutions and accelerators across new product introduction (NPI)
increase the efficiency of automotive, TCHM and aerospace clients in introducing new products
to the market. The range of offerings span across digital product development solutions to
strengthen NPI processes, digital supply chain solutions for agility and risk management, digital
manufacturing solutions for better quality, agility and operational efficiencies, digital customer
experience and after-sales solutions to manage the entire customer journey effectively, and
digital transformation solutions enabled by proprietary digital wall to manage the digital thread.
The company has built expertise in integration across PLM, ERP and MES solutions by
developing proprietary integration accelerators. Enterprise solutions help OEMs address
production-specific challenges and accelerate their digital transformation journey, while
integrating the digital thread across the lifecycle. The company has also added additional value
through cross-selling services solutions to clients. It resells PLM application software through
long-standing partnerships with Siemens Industry Software Inc., Dassault Systemes, and
Autodesk. Strategic benefits from these partnerships include visibility of future product
roadmaps, better client solutions and reduced client-acquisition costs.
Management believes the proprietary platforms offer a strategic competitive advantage,

creating strong barriers to entry and help in cost competitiveness, faster deployment,
scalability, de-risking, improving program management, and driving operational logistics more
efficiently.
November 19, 2023 |17
Exhibit 23: Tata Tech’s proprietary platforms and accelerators across the value chain
Marquee set of clients across anchor accounts, traditional OEMs and new energy
vehicle companies
The company has a diversified global presence across Asia Pacific, Europe, and North America
and partners with many of the largest manufacturing enterprises in the world. As of September
30, 2023, clients consisted of more than 35 traditional automotive OEMs and tier-1 suppliers
and over 12 new energy vehicle companies. The client portfolio includes its anchor clients, TML
and JLR, leading traditional OEMs like Airbus, McLaren, Honda, Ford, and Cooper Standard, and
tier-1 suppliers as well as new energy vehicle companies such as VinFast, among others such
as Cabin Interiors and Engineering Solutions and ST Engineering Aerospace. According to
Zinnov, Tata Tech’s key accounts comprise 6 out of the top 10 and 12 of the top 20 global
automotive ER&D spenders and 5 out of the 10 prominent new energy ER&D spenders globally.
Exhibit 24: High repeat rate depicts deep and long-lasting relationships with clients
99%
98.4%
99%
98% 97.6% 97.7%
Repeat Rate (%)
98% 97.2%
97%
97%
96% 95.7%
96%
95%
95%
94%
November 19, 2023 |18
Exhibit 25: Company has significantly increased the services revenue contribution from non-
anchor base from FY20 level
Anchor clients Non-anchor clients
120%
100%
80% 45.7% 48.6% 54.0%

59.7% 59.8%
60%
40%
54.4% 51.4%
20% 40.3% 40.2% 46.0%
0%
The combination of anchor clients, traditional OEMs, and new energy vehicle companies provide
a balanced mix of stability and growth, with revenue stability and further growth opportunities
from anchor clients and traditional OEMs and significant growth opportunities with new energy
vehicle companies.
Global delivery centers enabling better client engagement and scalability
As of Sep-23, the company has a global workforce of over 12,451 employees serving multiple
global clients from 19 global delivery centers in Asia Pacific, Europe, and North America. It
ensures a balance between onshore client proximity and offshore efficiency by leveraging low-
cost offshore delivery model to move a greater portion of the work offshore to India and
Romania. The company has ~1,717 employees based out of strategic onshore locations,
enabling greater proximity to clients. In addition, the onshore delivery centers are made up of
a majority of local national talent and have local presence in all the key automotive ER&D
markets globally.
Exhibit 26: Global delivery centers in APAC, Europe, and North America
Leveraging manufacturing domain knowledge to tap into the large upskilling and
reskilling market
Technological innovations are driving change within the global manufacturing sector, resulting
in an increase in demand for new-age engineering skills and capabilities. The company’s digital
and technology capabilities and long-standing manufacturing expertise coupled with years of
experience of providing skills training, initially through teacher-led classroom training and
subsequently through its proprietary iGetIT platform, have positioned the company to help
address the growing engineering upskilling needs.
November 19, 2023 |19
Tata Tech’s library of digital engineering and manufacturing training programs and competency
center labs enable organizations to onboard employees through personalized programs and
upskill and reskill employees based on skills gaps.
The company’s partnerships in India have recently extended beyond iGetIT offering to the
development of an entire phygital proposition. It has been engaged by various state
governments in India for the upgradation of their ITIs and universities for upskilling and, as a
result, the company has been able to build strong capabilities and a presence in the educational
sector. Tata Tech recently signed MoA and MoU with a state government and a cooperative
industrial research association to modernize the ITIs and offer joint certification programs in
automotive education. As of September 30, 2023, the company has entered into engagements
with six state governments to transform their ITIs into centers of excellence (CoEs) as part of
their initiatives to improve the employability of youth.
Management believes these relationships within the public sector institutions will allow them
to invest and further improve the course content on iGetIT offering, which will reinforce the
private sector’s enterprise proposition.
November 19, 2023 |20
Key Strategies
The focus of its strategy is to build the capacity and capabilities necessary to develop and
increase the value of the business by growth across multiple dimensions, including
strengthening relationships with existing clients, targeting selective new additions of large
ER&D spenders, expansion of digital engineering and embedded capabilities, strengthening
service delivery, and expanding client base in the education sector.
Deepen engagements within the existing client base
The company believes it has significant opportunity within its client base to increase the use of
product offerings and further develop deeper, long-term strategic partnerships. Currently, the
top-20 clients by revenue attributable to the services segment account for ~88% of FY23
services revenue. It plans to drive further value by prioritizing the right high-potential accounts
through strategic account planning. The company is also investing in building capabilities of
frontline sales teams in priority domains and aims to conduct proactive campaigns and cultivate
across top accounts to increase the penetration of priority offerings.
Targets top ER&D spenders in select high-priority verticals and key geographies
The company aims to secure projects with the top ER&D spenders within the focus verticals of
automotive, aerospace, and TCHM. According to Zinnov, automotive ER&D is highly
concentrated among the top-20 companies, in terms of ER&D spend for 2022, which account
for 73% of the global spend. It aims to strengthen its dedicated business development strategy
to focus on high-potential accounts with large annual ER&D spends and new energy vehicle
companies. Empanelment by Airbus in Dec-21 is expected to become a strong growth avenue.
Organic approach of targeting top ER&D spenders is complemented by tuck-in acquisitions,
helping accelerate client acquisition or capability building.
Expand capabilities in digital engineering and embedded systems
Tata Tech is focused on scaling up the embedded and digital and software-defined vehicle
capabilities and offerings through investments and strengthening alliances as part of its
diversification strategy. It is also focused on leveraging full turnkey product development
capabilities related to EVs. It has also targeted large new projects to establish growth
momentum and intends to expand the business through selective acquisitions that provide
access to better technology, a broader geographical reach, capabilities, and key clients. The
company has invested in establishing strong partnerships and alliances, such as with Dassault,
Logility, Siemens Industry Software Inc., Codincity, and Fantasy and by availing Microsoft
AZURE products/services that augment the company’s efforts and enable it to expand its client
reach across verticals and geographies.
Strengthening service delivery through capacity and capability building and

optimizing delivery processes
The company continues to work on strengthening the forecasting processes, resource

management processes, and automation of non-core processes to enhance delivery excellence
and strengthen pricing models that will enable margin improvement while creating value for all
stakeholders. It is focused on building the talent supply chain to ensure that it fulfils client
requirements at the right time and at the right cost. It plans to drive offshoring, optimize the
employee pyramid and span of control, invest strongly in recruiting, development and retention
of employees, increase utilization rates, drive sub-contractor optimization where applicable,
and drive increased productivity.
In addition, the company endeavors to reduce employee costs per engagement through an
optimized onshore-offshore mix. It is strategically analyzing work streams in current accounts
and aims to move select work streams to offshore talent (India and Romania and increase by
increasing offshore workforce). It is also focused on building a strong talent development
strategy to onboard and upskill the employees and has launched various campaigns to
strengthen the employer’s brand to attract new talent.
Expand capabilities and enterprise client base in the education sector
The global manufacturing sector is being disrupted by technological changes. There is a large
engineering upskilling requirement globally, and particularly in India, in the manufacturing
November 19, 2023 |21
sector. According to NASSCOM and Draup, India will need 1.4-1.9mn engineers to meet
demand in 2026. The company trains its engineers through a combination of classroom-training
programs and utilizing its proprietary iGetIT offering, an online learning system with courses
related to engineering design software and skills. The iGetIT platform is used by enterprise
clients as well as public sector institutions in India to train engineering, polytechnic and ITI
students.
Additionally, academic partnerships in India have extended beyond the iGetIT offering to the
development of an entire phygital proposition, and the company intends to further engage with
state governments on ITI upgradation projects.
The company aims to leverage its experience and relationships within the public sector to
improve its iGetIT platform and will continue to invest and develop the platform with additional
modules as needed to reinforce private sector enterprise proposition.
November 19, 2023 |22
Industry verticals
The company provides services and technology solutions across the industry verticals of
automotive and others, including TCHM, aerospace and other verticals.
Exhibit 27: Total revenue mix (%)
Services segment Technology solutions segment
120%
100%
17.8% 19.6% 24.9% 19.9% 21.3%
80%
60%
40% 82.2% 80.4% 75.1% 80.1% 78.7%
20%
0%
Exhibit 28: Revenue mix (%) of the services segment
Automotive Others
120%
100%
18.5% 17.8% 14.1% 11.6% 11.4% 12.2%
80%
60%
85.9% 88.4% 88.6% 87.8%
40% 81.5% 82.2%
20%
0%
Exhibit 29: Revenue mix (%) of the technology solutions segment
Products Education
120%
4.5%
100% 9.1%
80% 28.1%
44.0%
60% 50.8%
56.7%
95.5% 90.9%
40% 71.9%
49.2% 56.4%
20% 43.6%
0%
Automotive
In the automotive vertical (the company’s largest vertical), the offerings enable clients to
innovate and create new products, from specific component designs to full vehicle development
through engineering and design services. Its automotive engineering process involves market
definition and product strategy, concept styling and vehicle architecture, detailed engineering
and design, manufacturing process and resource planning, product and process validation,
production readiness and production launch, and continuous improvement. In addition, end-
to-end product development, product engineering expertise, and digital solutions for the
automotive industry facilitate the development of lightweight structures for EVs and next-
generation connected vehicles, thereby delivering greener and safer products. The company is
November 19, 2023 |23
currently engaged with 7 out of the top 10 and 12 out of the top 20 automotive ER&D spenders
(across OEMs and tier-1 suppliers) and 5 out of the 10 prominent new energy ER&D spenders.
The company offers a one-stop platform for automotive OEMs to meet new engineering needs
across the value chain. It has capabilities in areas such as product engineering (new product
development from concept to realization), value engineering (benchmarking, costing and
enabling design), manufacturing (lean and digital manufacturing, integrating digital thread with
the manufacturing value chain), and sales and after sales (omni-channel client experience and
product lifecycle extension, effective maintenance, repair and operations). In addition, the
company offers multiple bespoke solutions such as pre-studies for concept vehicles, virtual
simulation, body engineering, battery management systems, battery swap systems,
ePowertrain, embedded infotainment, vertical integration of value chain, smart manufacturing,
digital thread enablement, telematics and digital sales and marketing, data management
systems (DMS), and service management. It also specializes in delivering turnkey full-vehicle
solutions, a competency developed over a period of 10 years, which has been facilitated by a
global footprint that positions delivery centers close to key clients. With turnkey full-vehicle
solutions, it primarily focuses on the development of the digital product and management of
the test, validation and launch processes. While the building of porotype parts/vehicles and
physical testing is typically managed by the OEM, it also has such capabilities and has an
established network of global partners to facilitate these requirements.
Electric Vehicle Modular (eVMP) Platform
The Electric Vehicle Modular Platform (eVMP) is an accelerator to enable the creation of scalable
and flexible vehicle platforms for OEMs, including new energy vehicle companies that allow
them to evaluate rapid changes to configurations and enables reduction of the NPI cycle time
and quicker launch timelines. The virtual platform approach helps in reducing development
timelines, improving cost competitiveness, parts and scalability, and de-risking through virtual
validation.
Aerospace
The aerospace and defense industry is regaining growth momentum with increased travel
demand across the globe and has been adopting new digital technologies to improve services
to its customers. According to Zinnov, the global ER&D spend for the aerospace and defense
market size was valued at USD52bn in 2022 and is expected to increase by ~USD10bn by
2026.
In the aerospace vertical, Tata Tech helps global aerospace companies to design, engineer and
validate aircrafts using advanced processes, tools and technologies to manage clients’ capacity
utilization, product quality, operations and maintenance costs, and safety and security.
Traditionally, the partnership included product and tooling design, interiors and seating layouts,
and enterprise optimization through PLM and ERP deployment services. More recently, the
company leveraged its deep automotive domain knowledge in manufacturing tooling to enter
the aerospace MRO sector.
The company’s aerospace engineering services include concept design, concept and feasibility
studies, industrialization, luxury customization, detail design, virtual validation, MRO/tooling,
manufacturing support, sales and aftermarket service, and technical publications. Through the
process, the company helps clients drive efficiencies and innovation throughout the product
lifecycle while maximizing product quality and achieving operational benefits by leveraging
innovative designs to build structures such as fuselage, wings, empennage, landing gears,
control surfaces, and engine parts including fuel metering control systems. Its capabilities also
include providing solutions for structures, engines, systems, interiors and MRO as well as
overhaul.
Increasing demand for zero carbon emissions, global competition, and growing commercial
aircraft backlog are the primary trends putting increased pressure on OEMs to deliver high-
precision products faster. According to Zinnov, key aircraft and component manufacturers have
recently announced capacity expansion plans and new manufacturing plants to address aircraft
backlog and meet customer requirements. Furthermore, increased focus on narrow-body
aircrafts is expected to present a significant opportunity to ER&D service providers in the areas
of body engineering, which is a mature segment of outsourcing. Passenger-to-freighter
conversion is another attractive area of opportunity for engineering services companies. Digital
technologies are finding use cases all the way from asset tracking and inventory management
November 19, 2023 |24
to digital MRO and the ER&D service provider ecosystem is being leveraged for digital thread
enablement.
Tata Tech’s clients are primarily tier-1 suppliers and OEMs. For example, the company is
selected as an engineering, manufacturing engineering, and client services strategic supplier
(EMES3) by the global aerospace company, Airbus. With product development at the heart of
the business, it believes that the company understands the complexity of the aerospace
industry and can help in all stages of the product development process – from concept to flight
and beyond to aftermarket services.
Transportation and Construction Heavy Machinery (TCHM)
The global TCHM ER&D spend is estimated to grow from USD43bn in 2022 to USD49bn by
2026. Innovation in the TCHM industry typically lags behind the automotive sector innovation
by 3-5 years. The company expects key trends like electrification, connected equipment and
carbon footprint reduction will drive the TCHM industry in the coming years. Further, OEMs are
exploring new lines of revenue and ways to bring new products to market faster to reduce
costs and are looking to scale up production rapidly and speed up their product development
processes.
In the TCHM vertical, Tata Tech provides services to equipment manufactures on an extensive
range of products, including earth moving and construction equipment, mining, agricultural,
and forestry heavy machinery. The TCHM team includes specialists in mechanical engineering,
product design, electrical, electronics and embedded design, control systems, powertrain and
hydraulics.
The capabilities include providing support and solutions in areas such as styling, benchmarking,
concept design, detail design and validation, electrical development, hydraulics development,
vehicle integration, powertrain integration, cabs and bodies, manufacturing support, engine
installation, machine localization, powertrain development, emission compliance, hydraulic
systems, and electrical system and structures.
Others
Tata Tech is also developing additional offerings to expand its operations across other relevant
industries, such as industrial and medical equipment sectors. As client expectations are
evolving, businesses are racing to deliver competitive and better products more quickly. With
digitization being the key to facilitating innovation, achieving efficiency and enabling the
‘factory of the future,’ industrial companies sought substantial investments in digital initiatives
and technologies like AI/ML, digital twin, analytics, automation remote monitoring and
predictive maintenance.
Management believes its proven expertise in engineering and a broad portfolio of in-house
digital accelerators help clients achieve business outcomes that give them a competitive edge
over other companies in the industry. Moreover, its digital operation offerings have sought to
enable the digital transformation of business processes and shop floor-to-top-floor automation
for enhanced flexibility in operations with faster cycle times across the entire manufacturing
value chain.
The company offers a holistic approach to industrial clients integrating its proprietary solutions
across the product design and manufacturing value chains of clients’ ecosystem to facilitate
the development of advanced industrial products. In the industrial sector, the company has
enabled, among others, the digitization of factories, processes and operations using emerging
technologies such as industrial IoT, AI/ML, digital twin, analytics and automation.
Global Delivery Model

Tata Tech services its clients using the global sales and delivery network comprising 19 global
delivery centers in North America, Europe, and Asia Pacific. At each of the global delivery
centers, it employs a majority of local nationals, which allows to maintain a responsive local
presence near clients. The company has a local presence in all the key automotive ER&D
markets globally with ~1,434 employees in Europe, ~336 employees in North America, ~219
employees in Asia Pacific, excluding India, and 10,462 employees in India, each as of
September 30, 2023. Management believes the onshore/offshore global delivery model enables
it to provide aligned onshore client proximity required to support the iterative nature of product
development services, complemented by the ability to operate at scale with cost effectiveness
through offshore sourcing.
November 19, 2023 |25
Exhibit 30: Revenue mix (%) of onshore/offshore delivery model across periods
Onshore Offshore
100%
80%
52% 54% 50% 50% 51%
60%
40%
48% 46% 50% 50% 49%

20%
0%
Exhibit 31: Revenue mix (%) attributable to the services segment sourced from outside India
and Romania
Onshore Offshore
100%
31% 35% 36% 36% 34%

80%
60%
40%
69% 65% 64% 64% 66%
20%
0%
Clients
Tata Tech services multiple clients globally through 19 global delivery centers across North
America, Europe, and Asia Pacific. According to Zinnov, Tata Tech’s current clients include 7
out of 10 and 12 out of top 20 automotive ER&D spenders (across OEMs and tier-1 suppliers).
Exhibit 32: Dependency on anchor clients has reduced over a period of time
100% 88%
80% 84%
75%
80% 71%
67%
60% 54%
46%
40%
20%
0%
Anchor Top 5 Clients Top 10 Clients Top 20 Clients
November 19, 2023 |26
Exhibit 33: Improvement in client buckets from FY20 through H1FY24
38
40
33
35
30
25
20
15 10
8
10 5 6
2 3 2 3
5
0
$50 million + $20 million + $10 million + $5 million + $1 million +
November 19, 2023 |27
Concerns
Higher client concentration exposes the company to deterioration in client’s business
The company is exposed to continued growth in top clients and any deterioration in client’s
business may lead to slower growth. The top 5 clients, which include JLR, Tata Motors and
VinFast, contributed to ~57% of overall revenue and ~71% of services revenue in H1FY24.
The company was heavily dependent on anchor clients (Tata Motors and JLR), with a revenue
mix of more than 54% in 2020. Nevertheless, it had consciously diversified the client portfolio,
resulting in anchor clients’ mix reducing to ~46% in H1FY24.
Company derives/likely to derive significant revenue from new energy vehicle

companies/startups and business continuity and growth depends on their success
The company expects a significant amount of future revenue to come from new energy vehicle
companies, many of whom may be startup companies. Uncertainties about their funding plans,
future product roadmaps, ability to manage growth, creditworthiness, and ownership changes
may adversely affect the company’s business. New energy vehicle companies may be prone to
consolidation within the industry, which may lead to curtailing of the outsourcing business to
Tata Tech.
Some client contracts contain benchmarking and most-favored client provisions
Some of the client contracts, including contracts with anchor clients, contain benchmarking and
most-favored client provisions. The company derived ~10% of revenue in H1FY24 from
contracts containing benchmarking and most-favored client provisions.
Growing share of education business may weigh on margins and cash generation
The company has expanded its offerings in the education business through iGetIT platform to
public and private sector academic institutions through curriculum development and
competency center offerings for upskilling and reskilling in relation to the latest engineering
and manufacturing technologies. This would enable it to spearhead further expansion into
enterprise customers. There is high dependency on third parties for quality, delivery and
commercial details in the education business. The education business operated at lower
margins compared with other businesses and has been particularly exposed to fluctuations in
revenue due to the nature and frequency of the projects and the payments involved in the
contracts. It derives ~97% of education revenue in H1FY24 from projects with state
governments and public universities.
November 19, 2023 |28
Valuations reasonable; factors in client concentration

and historical growth profile
The IPO is slated to open on November 22, 2023, with an expected listing by December 5,
2023. Post-issue implied market cap depending on the price band (Rs475-500/share, face
value of Rs2) is likely to be Rs192.7bn to Rs202.8bn.
The company’s growth trajectory remains slower than peers over FY16-23, but it has improved
in the last 3 years on account of traction in select accounts. Weakness observed in a large
client in H1FY24 due to near completion of the large full vehicle development projects may
weigh on near-term performance and, in our view, IPO valuation has captured it adequately.
At the upper end of the price band, Tata Tech is being valued at ~32x its FY23 EPS vs. its peers
such as LTTS (~40x its FY23 EPS), Tata Elxsi (~69x its FY23 EPS), KPIT (~110x its FY23 EPS),
and CYL (~37x its FY23 EPS).
Based on business valuations (Implied market capitalization, post listing), at the upper end of
the price band of Rs500/share (market cap of ~Rs203bn), we look at three scenarios:
 Scenario 1: Attractive valuation: Assumptions of a revenue CAGR of 18% from FY23-

FY26 (business mix shift towards services) with EBITDAM of 20%.
 Scenario 2: Fair valuation: Assumptions of a revenue CAGR of 14% from FY23-FY26

(business mix stable) with EBITDAM remaining stable at 18.6%.
 Scenario 3: Expensive valuation: Assumptions of a revenue CAGR of 10% from FY23-

FY26 (business mix shift towards technology solutions) with EBITDAM of 17.5%.
Exhibit 34: Tata Tech's valuation as per different revenue and margin profiles
Rs mn Scenario 1 Scenario 2 Scenario 3

Valuation ask 2,02,834 2,02,834 2,02,834
EV 1,92,544 1,92,544 1,92,544
FY23
Revenue 44,142 44,142 44,142
EBITDA 8,209 8,209 8,209
EBITDAM 18.6% 18.6% 18.6%
FY26
Revenue 72,526 65,398 58,753
CAGR 18.0% 14.0% 10.0%
EBITDA 14,505 12,164 10,282
CAGR 20.9% 14.0% 7.8%
EBITDAM 20.0% 18.6% 17.5%
EV/Sales (x) 2.7 2.9 3.3

EV/EBITDA (x) 13.3 15.8 18.7
November 19, 2023 |29
Exhibit 35: Bloomberg - Relative Valuation
Company Year-end Currency CMP M Cap Sales (in mn) EBITDAM (%) Net income (in mn)
(US$ bn) 1FY 2FY 3FY 1FY 2FY 3FY 1FY 2FY 3FY
L&T TECHNOLOGY
03/2023 INR 4454 5.7 96,492 1,09,367 1,23,922 19.9% 20.1% 20.4% 13,010 15,070 17,476
SERVICES LTD
CYIENT LTD 03/2023 INR 1731 2.3 71,878 81,949 90,039 18.4% 18.4% 18.8% 7,627 8,990 10,448
KPIT TECHNOLOGIES
03/2023 INR 1537 5.1 47,203 57,228 69,415 20.2% 20.7% 21.2% 5,698 7,342 9,391
LTD
TATA ELXSI LTD 03/2023 INR 8307 6.2 35,972 41,997 49,047 30.1% 29.5% 28.9% 7,906 9,253 11,025
ASSYSTEM 12/2022 EUR 42 0.7 571 610 653 8.8% 9.3% 9.6% 43 48 54
BERTRANDT AG 09/2022 EUR 49 0.5 1,146 1,235 1,328 9.2% 10.6% 11.0% 30 44 55
ALTEN SA 12/2022 EUR 126 4.8 4,092 4,364 4,649 11.3% 11.7% 12.2% 272 317 347
AFRY AB 12/2022 SEK 126 1.4 26,928 28,033 29,279 10.1% 10.3% 10.9% 1,201 1,375 1,631
Company Year-end P/E P/S EV/EBITDA EV/Sales

1FY 2FY 3FY 1FY 2FY 3FY 1FY 2FY 3FY 1FY 2FY 3FY
L&T TECHNOLOGY
03/2023 36.2 31.2 26.9 4.9 4.3 3.8 23.8 20.7 18.0 4.7 4.2 3.7
SERVICES LTD
CYIENT LTD 03/2023 25.1 21.3 18.4 2.7 2.3 2.1 14.6 12.8 11.4 2.7 2.4 2.1
KPIT TECHNOLOGIES
03/2023 73.9 57.4 44.9 8.9 7.4 6.1 43.7 35.1 28.4 8.8 7.3 6.0
LTD
TATA ELXSI LTD 03/2023 65.4 55.9 46.9 14.4 12.3 10.5 46.9 41.0 35.8 14.1 12.1 10.4
ASSYSTEM 12/2022 15.2 13.7 12.1 1.1 1.1 1.0 11.6 10.4 9.3 1.0 1.0 0.9
BERTRANDT AG 09/2022 16.4 11.2 9.1 0.4 0.4 0.4 6.4 5.2 4.6 0.6 0.5 0.5
ALTEN SA 12/2022 16.2 13.9 12.7 1.1 1.0 0.9 9.5 8.6 7.8 1.1 1.0 0.9
AFRY AB 12/2022 11.9 10.4 8.7 0.5 0.5 0.5 7.1 6.6 6.0 0.7 0.7 0.7
Median 20.8 17.6 15.5 1.9 1.7 1.6 13.1 11.6 10.4 1.9 1.7 1.5
Source: Bloomberg, Emkay Research
Exhibit 36: Peer comparison
FY23 FY23 FY20-23 CAGR FY16-23 CAGR

Company Mcap (USD bn) RoE OCF/EBITDA (%) Revenue EBIT PAT Revenue EBIT PAT
Tata Tech* 2.4 23.7% 48.9% 15.7% 25.1% 35.4% 7.4% 7.4% 7.2%
LTTS 5.7 25.6% 76.3% 12.6% 16.8% 12.6% 14.7% 18.1% 15.8%
Cyient 2.3 17.5% 54.1% 10.8% 23.4% 14.5% 9.9% 12.8% 6.8%
KPIT 4.9 25.5% 72.8% 16.0% 37.7% 37.5% NA NA NA
Tata Elxsi 6.3 41.0% 50.6% 25.0% 43.2% 43.4% 16.6% 21.5% 25.4%
Source: Company, Emkay Research. *Tata Tech’s MCap is calculated at the upper end of the price band
November 19, 2023 |30
Offer details
Tata Tech’s IPO is a complete OFS with existing shareholders, including promoters looking to
sell their stake. Selling shareholders include Promoters and Promoter Groups – Tata Motors
Limited and Tata Motors Finance Limited along with other investors – Alpha TC Holdings and
Tata Capital Growth Fund I.
Exhibit 37: Shareholding structure pre and post the IPO
Pre-IPO Post-IPO
No. of shares Holding (%) No. of shares Holding (%)
Total no of shares O/S 40,56,68,530 100.0% 40,56,68,530 100.0%
Promoter and promoter group 27,09,64,736 66.8% 22,46,89,736 55.4%
Tata Motors Limited 26,28,44,816 64.8% 21,65,69,816 53.4%
Tata Motors Finance Limited 81,19,920 2.0% 81,19,920 2.0%
Public shareholders 13,47,03,794 33.2% 18,09,78,794 44.6%
Tata Capital Growth Fund I 1,47,22,500 3.6% 98,64,075 2.4%
Alpha TC Holdings Pte Ltd. 2,94,45,010 7.3% 1,97,28,157 4.9%
TPG Rise Climate SF Pte. Ltd. 3,65,09,794 9.0% 3,65,09,794 9.0%
Patrick Raymon McGoldrick 50,00,000 1.2% 50,00,000 1.2%
Zedra Corporate Services (Guernsey) Limited 57,66,720 1.4% 57,66,720 1.4%
Others 4,32,59,770 10.7% 10,41,10,048 25.7%

*Employee reservation portion: 2.02mn shares
TML’s shareholders' reservation portion: 6.08mn shares
Exhibit 38: Shareholding structure post the IPO
% holding
Zedra
Corporate
Services Others,
(Guernsey) 25.7% Tata Motors
Limited, 1.4% Limited, 53.4%
Patrick Raymon
McGoldrick, 1.2%
TPG Rise Climate

SF Pte. Ltd., 9.0%
Alpha TC
Holdings Pte Tata Motors
Ltd., 4.9% Tata Capital Finance Limited,
Growth Fund I, 2.0%
2.4%
Source: RHP, Emkay Research. Promoter holding highlighted in bold
Exhibit 39: OFS details
OFS 6,08,50,278 15.0%

Selling shareholders
Tata Motors Limited 4,62,75,000 11.4%
Tata Capital Growth Fund I 48,58,425 1.2%
Alpha TC Holdings Pte Ltd. 97,16,853 2.4%
November 19, 2023 |31
Management Team
Ajoyendra Mukherjee (Chairman, Independent Director): Ajoyendra holds a Bachelor’s
Degree in Engineering (Electrical and Electronics) from the Birla Institute of Technology and
Science. He was previously associated with Tata Consultancy Services Limited for almost four
decades, where he held positions such as the Head of Business Operations in Eastern India,
Middle East and Africa, and Switzerland; Global Head of CSR function, Global Head of Energy
and Utilities Practice and Executive Vice President and Global Head of Human Resources.
Warren Harris (CEO and Managing Director): Warren holds a Bachelor’s Degree in
Engineering (Technology) from Institute of Science and Technology, the University of Wales.
He holds a Doctorate in Philosophy (honoris causa) from Amity University, Uttar Pradesh. He
has completed the Advanced Management Program from Harvard Business School. He is a
Chartered Mechanical Engineer registered with and a member of the Institution of Mechanical
Engineers. He has been associated with the company since October 1, 2005.
Savitha Balachandran (CFO): Savitha Balachandran is responsible for global finance and
procurement in the company. She holds a Bachelor’s Degree in Commerce from Bangalore
University and a Post-Graduate Diploma in Management from Symbiosis Centre for
Management and Human Resource Development. She has completed the Fulbright Scholarship
Program in 2012. She has also cleared the final examination for Chartered Financial Analyst
from the CFA Institute. Prior to joining the company, she was associated with Tata Motors
Limited.
Nachiket Paranjpe (President – Automotive Sales): Nachiket joined Tata Technologies

Europe Limited, one of the company’s subsidiaries, in 2019. He is responsible for sales and
client engagement at JLR. He holds a Bachelor’s Degree in Mechanical Engineering from
Maharashtra Institute of Technology, University of Pune, and a Master’s Degree in Science in
Management from Purdue University. Prior to joining the company, he was associated with
KPIT Technologies GmbH as Head of Germany Automotive Integrated Business Unit.
Aloke Palsikar (EVP and Head – Aerospace and Industrial Heavy Machinery Sales):
Aloke is responsible for global sales for non-automotive industry verticals. He holds a Bachelor’s
Degree in Electrical Engineering from the University of Bombay, a Master’s Degree in
Technology in Electrical Engineering with electrical machines and drives from IIT, Bombay, and
has completed the Management Education Program from IIM, Ahmedabad. Prior to joining the
company, he was associated with Siemens Limited as Chief Manager – Marketing, Larson &
Toubro Infotech Limited as Assistant General Manager, Tech Mahindra Limited as Global
Competency H, and Satyam Computer Services Limited as Assistant Vice President.
Prahalada Rao (President and Client Partner – Tata Motors): Before joining Tata
Technologies (Jun-21), Prahalada worked at Mahindra & Mahindra for over 27 years in various
managerial and leadership roles in areas extending from business strategy, product
development, and digital transformation to change management. In his last role at Mahindra
& Mahindra, Prahalada headed the Business Strategy, Transformation and Planning Division,
Auto and Farm Sector. He joined the company in 1994 and led the concept development of
several global platforms, such as XUV 500, Tivoli, Scorpio, Rexton G4, KUV 100, Bolero pickup
trucks, THAR, and several diesel and gasoline powertrains. Prahalada holds a PGDM from SP
Jain Institute of Management & Research, Mumbai, and a Bachelor’s Degree in Mechanical
Engineering from Bangalore University. He is a part of the Executive Leadership Team (ELT) at
Tata Technologies focused on driving strategies to accelerate business transformation and
ensure financial returns.
November 19, 2023 |32
Financials
Exhibit 40: Balance Sheet statement
Rs mn FY20 FY21 FY22 FY23 H1FY23 H1FY24

ASSETS
Non-current assets
Property, Plant and Equipment 1,051 872 1,145 1,202 1,147 1,318
Capital work-in-progress 1 0 3 27 - -
Right-of-use-asset 2,469 2,326 1,879 1,803 1,696 1,848
Goodwill 6,999 7,259 7,293 7,629 7,088 7,662
Other Intangible assets 673 440 362 320 319 408
Intangible assets under development 3 1 - 1 - -
Investments in joint venture
Financial assets:
Investment 50 - - - - -
Trade receivables 157 - - - - -
Loans 16 3 0 -
Other financial assets 264 216 442 437 440 627
Deferred tax assets (net) 320 430 574 1,521 598 1,860
Income tax assets (net) 161 220 303 305 304 303
Other non-current assets 71 85 377 797 373 949
Total Non-current Assets 12,236 11,852 12,378 14,040 11,965 14,974
Current Assets
Financial assets:
Investments 311 4,971 5,277 298 - 898
Trade receivables
Billed 6,251 4,534 6,473 9,518 7,478 10,134
Unbilled 983 1,423 1,209 1,545 1,618 2,113
Cash and cash equivalents 3,761 7,813 7,683 3,828 7,133 4,286
Other bank balances 129 21 1,011 6,164 2,726 3,860
Loans 278 2,517 463 4,902 4,220 1,208
Other financial assets 423 268 328 744 332 875
Current tax assets (net) 261 314 107 326 304 30
Other current assets 1,097 2,014 7,252 10,650 5,954 13,048
Total Current Assets 13,494 23,875 29,802 37,975 29,764 36,450
Total assets 25,730 35,727 42,180 52,015 41,730 51,424
EQUITY AND LIABILITIES

Equity
Equity Share capital 418 418 418 811 406 811
Other Equity 18,108 21,003 22,383 29,083 24,413 27,720
Total Equity 18,526 21,422 22,802 29,895 24,819 28,531
Liabilities
Non-current Liabilities
Financial Liabilities:
Lease Liabilities 2,297 2,327 2,232 2,148 2,025 2,128
Other financial liabilities 3 5 4 5 4 7
Provisions 225 152 187 233 226 292
Other non-current liabilities 152
Total Non-current liabilities 2,677 2,484 2,422 2,386 2,255 2,427
Current Liabilities
Financial Liabilities:
Lease Liabilities 285 335 383 406 366 470
Trade payables
total outstanding dues of MSME 64 1 172 1,072 75 85
total outstanding dues of creditors other than MSME 2,367 2,236 3,194 5,506 3,056 4,710
Other financial liabilities 401 31 2,559 46 33 37
Other current liabilities 1,085 9,072 10,127 11,749 10,538 13,962
Provisions 166 119 307 339 275 256
Current tax liabilities (net) 158 28 216 616 313 945
Total Current Liabilities 4,527 11,822 16,957 19,734 14,656 20,466
Total Liabilities 7,204 14,306 19,379 22,120 16,911 22,893
Total Equity and Liabilities 25,730 35,727 42,180 52,015 41,730 51,424
November 19, 2023 |33
Exhibit 41: Income statement

Services revenue 23,435 19,177 26,548 35,352 16,429 19,884
Technology solutions revenue 5,086 4,632 8,747 8,790 2,450 5,383
Total revenue 28,521 23,809 35,296 44,142 18,879 25,267
Growth (%) -3.1% -16.5% 48.2% 25.1% 33.8%
Cost of products or sale / Purchase of technology solutions 3,679 3,383 6,885 6,825 1,773 4,235
Employee costs 14,185 12,160 15,127 19,295 8,911 11,319
Outsourcing and consultancy charges 3,046 2,414 3,998 5,697 2,478 2,905
Other expense 2,906 1,995 2,829 4,116 1,991 2,160
% of sales
Cost of products or sale 12.9% 14.2% 19.5% 15.5% 9.4% 16.8%
Employee costs 49.7% 51.1% 42.9% 43.7% 47.2% 44.8%
Outsourcing and consultancy charges 10.7% 10.1% 11.3% 12.9% 13.1% 11.5%
Other expense 10.2% 8.4% 8.0% 9.3% 10.5% 8.6%
EBITDA 4,704 3,857 6,456 8,209 3,726 4,648

EBITDAM (%) 16.5% 16.2% 18.3% 18.6% 19.7% 18.4%
Depreciation 992 922 857 946 456 497

EBIT 3,712 2,935 5,599 7,264 3,270 4,150
EBITM (%) 13.0% 12.3% 15.9% 16.5% 17.3% 16.4%
Other income 449 448 488 877 224 607

% of sales 1.6% 1.9% 1.4% 2.0% 1.2% 2.4%
Finance cost 156 177 219 180 81 95
Exceptional items 86 54 - - - -
Profit before tax 3,919 3,153 5,868 7,961 3,413 4,663

PBTM (%) 13.7% 13.2% 16.6% 18.0% 18.1% 18.5%
Total tax expenses 1,404 761 1,499 1,721 822 1,144
ETR (%) 35.8% 24.1% 25.5% 21.6% 24.1% 24.5%
PAT 2,515 2,392 4,370 6,240 2,591 3,519
Adjusted EPS (basic, Rs) 6.0 5.7 10.5 15.4 8.7 6.4
November 19, 2023 |34
Exhibit 42: Cash Flow statement

CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year 2,516 2,392 4,370 6,240 2,591 3,519
Depreciation and amortization 992 922 857 946 456 497
Export incentive written off - - 133 - - -
Share-based payments to employees - - - 17 - 18
Provision for income tax 1,441 878 1,587 2,612 809 1,447
Provision for deferred tax (37) (117) (88) (890) 14 (303)
Dividend income on investments (2) - - -
(Profit)/Loss on sale of investments (0) (63) 39 (7) (6) 26
(Profit) on derecognition of lease liability/right to use assets - - (6) (7) - (4)
(Profit) on sale of tangible and intangible fixed assets (2) 3 (1) (1) (0) (4)
Interest income (70) (144) (397) (415) (106) (276)
Finance cost 156 177 219 180 81 95
Unrealized exchange loss/ (gain) 28 2 (5) 0 0 1
Effect of exchange differences on translation of foreign currency cash & cash equivalent 23 24 21 (19) (77) (11)
Allowances for expected credit loss (net) 131 40 (33) (138) (74) 11
Change in fair value of investments (22) 60 (2) (0) - (15)
Change in fair value of derivatives measured at FVTPL - - - 4 - (4)
Bad debts written-off - 113 113 -
Operating profit before working capital changes 5,153 4,174 6,693 8,635 3,799 4,996
Working capital adjustments
Decrease in inventories 0 -
(Increase) in billed trade receivables non-current (157) 157 - -
(Increase) in billed trade receivables current (406) 1,765 (2,091) (2,740) (1,116) (617)
(Increase)/Decrease in unbilled trade receivables current 57 (439) 234 (286) (449) (572)
(Increase) in other current financial assets 146 263 (71) (363) 5 (370)
(Increase) in other current assets (300) (920) (5,235) (3,375) 1,209 (2,405)
Decrease in non-current loans (17) 2 3 0 0 -
(Increase) in current loans 81 (2) (22) (10) (40) 7
(Increase) in other non-current assets (14) 9 (288) (383) (9) (152)
Increase in trade payables (693) (299) 1,102 3,026 (119) (1,771)
Increase/ (Decrease) in other financial liabilities non-current (1) 2 (1) 2 1 2
(Decrease)/ Increase in other financial liabilities current 384 (430) 0 (3) (4) 2
Increase in other liabilities (183) 7,967 490 2,014 (561) 1,729
Increase in current provisions (20) 17 188 31 (31) (83)
(Decrease) in non-current provisions (37) (35) (112) (103) (86) (18)
CASH GENERATED FROM OPERATIONS 3,995 12,231 891 6,443 2,599 749
Income taxes paid (net) (1,321) (1,102) (1,278) (2,429) (915) (827)
NET CASH GENERATED FROM/(USED IN) OPERATING ACTIVITIES 2,674 11,129 (387) 4,014 1,684 (78)
CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from sale of tangible and intangible fixed assets 7 10 5 4 1 4
Proceeds from sub lease receivable 2 - - 21 - 21
Interest received on bank deposit and others 5 11 56 76 13 126
Deposits with banks (15) 109 (991) (6,223) (1,139) (7,024)
Payment for purchase of tangible and intangible fixed assets (537) (147) (634) (657) (325) (478)
Proceeds from sale of investments - - 205 - - -
Proceeds from redemption of the deposits - - - 1,086 994 9,915
Redemption of preference shares 50 -
Inter corporate deposits placed (10,318) (11,245) (14,810) (18,395) (10,035) (8,923)
Inter corporate deposits refunded 10,645 9,010 16,885 13,973 6,288 12,610
Interest received from inter corporate deposit/bonds 50 124 325 255 73 118
Proceeds from settlement of loans 34 -
Purchase of mutual funds (390) (4,920) (5,675) (983) - (4,007)
Proceeds from redemption of the debentures - - 50 - - -
Proceeds from sale of mutual funds 390 313 5,326 5,968 5,283 3,441
NET CASH (USED IN)/GENERATED FROM INVESTING ACTIVITIES (76) (6,736) 742 (4,874) 1,153 5,803
CASH FLOW FROM FINANCING ACTIVITIES

Share application money received pending allotment 1 -
Payments for purchase of shares including premium (401) - - (2,959) (2,959) -
Proceeds from issue of shares including securities premium - 2 - -
Expenditure on buyback of shares (1) - (1) (0) (0) -
Interest paid (11) (25) (4) (1) (0) (1)
Dividends paid (including dividend tax) (1,815) - - (4,990)
Repayment of lease liabilities (384) (419) (439) (509) (245) (275)
NET CASH (USED IN) FINANCING ACTIVITIES (2,611) (441) (444) (3,469) (3,204) (5,265)
NET (DECREASE)/INCREASE IN CASH & CASH EQUIVALENTS (13) 3,952 (89) (4,329) (366) 460
Cash & cash equivalents at the beginning of the year 3,725 3,761 7,813 7,683 7,683 3,828
Less: Effect of exchange rate changes on cash and cash equivalents 23 24 21 (19) (77) (11)
Add : Translation adjustment on cash & bank balances of foreign subsidiaries 70 124 (20) 456 (261) (14)
Cash & cash equivalents at the close of the year 3,761 7,813 7,683 3,828 7,133 4,286
November 19, 2023 |35
GENERAL DISCLOSURE/DISCLAIMER BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL):
Emkay Global Financial Services Limited (CIN-L67120MH1995PLC084899) and its affiliates are a full-service, brokerage, investment banking, investment
management and financing group. Emkay Global Financial Services Limited (EGFSL) along with its affiliates are participants in virtually all securities trading
markets in India. EGFSL was established in 1995 and is one of India's leading brokerage and distribution house. EGFSL is a corporate trading member of
BSE Limited (BSE), National Stock Exchange of India Limited (NSE), MCX Stock Exchange Limited (MCX-SX), Multi Commodity Exchange of India Ltd (MCX)
and National Commodity & Derivatives Exchange Limited (NCDEX) (hereinafter referred to be as “Stock Exchange(s)”). EGFSL alon g with its [affiliates]
offers the most comprehensive avenues for investments and is engaged in the businesses including stock broking (Institutional and retail), merchant
banking, commodity broking, depository participant, portfolio management and services rendered in connection with distribution of primary market issues
and financial products like mutual funds, fixed deposits. Details of associates are available on our website i.e. www.emkayglobal.com.
EGFSL is registered as Research Analyst with the Securities and Exchange Board of India (“SEBI”) bearing registration Number INH000000354 as per SEBI
(Research Analysts) Regulations, 2014. EGFSL hereby declares that it has not defaulted with any Stock Exchange nor its activities were suspended by any
Stock Exchange with whom it is registered in last five years. However, SEBI and Stock Exchanges had conducted their routine inspection and based on their
observations have issued advice letters or levied minor penalty on EGFSL for certain operational deviations in ordinary/routine course of business. EGFSL
has not been debarred from doing business by any Stock Exchange / SEBI or any other authorities; nor has its certificate of registration been cancelled by
SEBI at any point of time.
EGFSL offers research services to its existing clients as well as prospects. The analyst for this report certifies that all of the views expressed in this report
accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was,
is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is
its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an
offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the clients
simultaneously, not all clients may receive this report at the same time. The securities discussed and opinions expressed in this report may not be suitable
for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient.
EGFSL and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. EGFSL may
have issued or may issue other reports (on technical or fundamental analysis basis) of the same subject company that are inconsistent with and reach
different conclusion from the information, recommendations or information presented in this report or are contrary to those contained in this report. Users
of this report may visit www.emkayglobal.com to view all Research Reports of EGFSL. The views and opinions expressed in this document may or may not
match or may be contrary with the views, estimates, rating, and target price of the research published by any other analyst or by associate entities of
EGFSL; our proprietary trading, investment businesses or other associate entities may make investment decisions that are inco nsistent with the
recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise
to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships
with the company or companies that are the subject of this material is provided herein. All material presented in this report, unless specifically indicated
otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or
distributed to any other party, without the prior express written permission of EGFSL . All trademarks, service marks and logos used in this report are
trademarks or registered trademarks of EGFSL or its affiliates. The information contained herein is not intended for publicat ion or distribution or circulation
in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise
expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as prescribed by Securities
and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to
be reliable, although its accuracy and completeness cannot be guaranteed.
This report has not been reviewed or authorized by any regulatory authority. There is no planned schedule or frequency for updating research report relating
to any issuer/subject company.
Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets.
Disclaimer for U.S. persons only: Research report is a product of Emkay Global Financial Services Ltd., under Marco Polo Securities 15a6 chaperone
service, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are
resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject
to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of Financial Institutions Regulatory Authority
(FINRA) or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public
appearances and trading securities held by a research analyst account.
This report is intended for distribution to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the
Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report
is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may
not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from
registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional
Investors. Emkay Global Financial Services Ltd. has entered into a chaperoning agreement with a U.S. registered broker -dealer, Marco Polo Securities Inc.
("Marco Polo"). Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer.
November 19, 2023 |36
RESTRICTIONS ON DISTRIBUTION
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state,
country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Except otherwise restricted by
laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of
such jurisdictions. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financ ial
instrument or as an official confirmation of any transaction to any U.S. person. Unless otherwise stated, this message should not be construed as official
confirmation of any transaction. No part of this document may be distributed in Canada or used by private customers in United Kingdom.
ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL)
The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and
their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is,
or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible of the
content of this research report, in part or in whole, certifies that he or his associated persons1 may have served as an officer, director or employee of the
issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the manageme nt company of the real estate
investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is respons ible for the management of the
issuer or the new listing applicant). The research analyst(s) primarily responsible for the content of this research report or his associate may have Financial
Interests2 in relation to an issuer or a new listing applicant that the analyst reviews. EGFSL has procedures in place to eliminate, avoid and manage any
potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report
operates as part of a separate and independent team to the investment banking function of the EGFSL and procedures are in place to ensure that confidential
information held by either the research or investment banking function is handled appropriately. There is no direct link of EGFSL compensation to any
specific investment banking function of the EGFSL.
1
An associated person is defined as (i) who reports directly or indirectly to such a research analyst in connection with the preparation of the reports; or (ii)
another person accustomed or obliged to act in accordance with the directions or instructions of the analyst.
2
Financial Interest is defined as interest that are commonly known financial interest, such as investment in the securities in respect of an is suer or a new
listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the fir m or analysis. This term does not
include commercial lending conducted at the arm’s length, or investments in any collective investment scheme other than an issuer or new listing applicant
notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL):
Disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with
reference to the subject company(s) covered in this report-:
1. EGFSL, its subsidiaries and/or other affiliates and Research Analyst or his/her associate/relative’s may have Financial Interest/proprietary positions in
the securities recommended in this report as of November 19, 2023
2. EGFSL, and/or Research Analyst does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Report
Disclosure of previous investment recommendation produced:
3. EGFSL may have published other investment recommendations in respect of the same securities / instruments recommended in this research report
during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment
recommendations published by EGFSL in the preceding 12 months.
4. EGFSL, its subsidiaries and/or other affiliates and Research Analyst or his/her relative’s may have material conflict of interest in the securities
recommended in this report as of November 19, 2023
5. EGFSL, its affiliates and Research Analyst or his/her associate/relative’s may have actual/beneficial ownership of 1% or more securities of the subject
company at the end of the month immediately preceding the November 19, 2023
6. EGFSL or its associates may have managed or co-managed public offering of securities for the subject company in the past twelve months.
7. EGFSL, its affiliates and Research Analyst or his/her associate may have received compensation in whatever form including compensation for
investment banking or merchant banking or brokerage services or for products or services other than investment banking or merchant banking or
brokerage services from securities recommended in this report (subject company) in the past 12 months.
8. EGFSL, its affiliates and/or and Research Analyst or his/her associate may have received any compensation or other benefits from the subject
company or third party in connection with this research report.
Emkay Rating Distribution

Ratings Expected Return within the next 12-18 months.
BUY Over 15%
HOLD Between -5% to 15%
SELL Below -5%
Emkay Global Financial Services Ltd.

CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com
November 19, 2023 |37
OTHER DISCLAIMERS AND DISCLOSURES:
Other disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst)
Regulations, 2014 with reference to the subject company(s) -:
EGFSL or its associates may have financial interest in the subject company.
Research Analyst or his/her associate/relative’s may have financial interest in the subject company.
EGFSL or its associates and Research Analyst or his/her associate/ relative’s may have material conflict of interest in the subject company. The research
Analyst or research entity (EGFSL) have not been engaged in market making activity for the subject company.
EGFSL or its associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately
preceding the date of public appearance or publication of Research Report.
Research Analyst or his/her associate/relatives may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the
month immediately preceding the date of public appearance or publication of Research Report.
Research Analyst may have served as an officer, director or employee of the subject company.
EGFSL or its affiliates may have received any compensation including for investment banking or merchant banking or brokerage services from the subject
company in the past 12 months. . Emkay may have issued or may issue other reports that are inconsistent with and reach different conclusion from the
information, recommendations or information presented in this report or are contrary to those contained in this report. Emkay Investors may visit
www.emkayglobal.com to view all Research Reports. The views and opinions expressed in this document may or may not match or may be contrary with
the views, estimates, rating, and target price of the research published by any other analyst or by associate entities of Emkay; our proprietary trading,
investment businesses or other associate entities may make investment decisions that are inconsistent with the recommendations expressed herein. EGFSL
or its associates may have received compensation for products or services other than investment banking or merchant banking or brokerage services from
the subject company in the past 12 months. EGFSL or its associates may have received any compensation or other benefits from the Subject Company or
third party in connection with the research report. EGFSL or its associates may have received compensation from the subject company in the past twelve
months. Subject Company may have been client of EGFSL or its affiliates during twelve months preceding the date of distribution of the research report and
EGFSL or its affiliates may have co-managed public offering of securities for the subject company in the past twelve months.
November 19, 2023 |38

Tata Tech IPO Notes

Uploaded by

Copyright:

Available Formats

Tata Tech IPO Notes

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Tata Tech IPO Notes

Uploaded by

Copyright:

Available Formats

Tata Technologies

Play on the fast-growing ER&D market

Tata Technologies (Tata Tech) is a leading global engineering services

Exhibit 1: ER&D services provided across various industry verticals

Source: RHP, Emkay Research

Global ER&D Services Spend (USDbn)

Source: RHP, Emkay Research

Digital engineering spend Legacy ER&D spend

Source: RHP, Emkay Research

Exhibit 4: Share of digital engineering spend is expected to be ~50% by CY25

Digital eng. Spend share (%)

Source: RHP, Emkay Research

Particular IT Services ER&D Services

Source: RHP, Emkay Research

Exhibit 6: ER&D spend of the top 1,000 enterprises in 2022

Top 100, 48%

Next 100, 11%

Source: RHP, Emkay Research

Exhibit 7: ER&D spends (USD bn) across industry verticals in 2022

ER&D Spend (USD bn)

Source: RHP, Emkay Research

Exhibit 8: Manufacturing-led vertical contributed ~48% to ER&D spend in 2022

% contribution to overall ER&D spend

Source: RHP, Emkay Research

Exhibit 9: ER&D spend (USD bn) across geographic regions

2020 2021 2022 2026E

Source: RHP, Emkay Research

Exhibit 10: Industry-wise ER&D spend and intensity

Top 5 industries’ R&D spend as a

Source: European Commission, Emkay Research

Exhibit 11: Key characteristics of service providers across different geographies

India Eastern Europe Western Europe North America

Source: RHP, Emkay Research

Key growth drivers in ER&D spending

d) Growing product complexity: Technology advancements are accelerating at a rapid pace

ER&D spend outsourced to third-party ESPs

The key growth drivers for increased outsourcing opportunities include –

 Shortening product development timelines: Rapid advancement of technology and faster

Global Automotive ER&D market

Automotive ER&D spend (USDbn)

Source: RHP, Emkay Research

Key trends driving ER&D spend in the automotive industry

Exhibit 13: ER&D spend (as a % of sales) of top automotive companies

VOLKSWAGEN MERCEDES-BENZ TOYOTA MOTOR GENERAL MOTORS

BMW FORD MOTOR HONDA MOTOR ROBERT BOSCH

Source: European commission, Emkay Research

Automotive outsourced ER&D market

Exhibit 14: Automotive outsourced ER&D market (USD bn) in 2022

Source: RHP, Emkay Research

Aerospace and Defense

Aerospace enterprises are focusing on digitalization to reduce costs, including shop-floor

Transportation and Construction Heavy Machinery (TCHM)

Education services: Untapped upskilling opportunity in India

Increased manufacturing focus on education and upskilling

% of companies imparting formal skill training

Source: Company, Emkay Research

Government spending: MSDE expects to spend USD318mn in 2023

Exhibit 16: Revenue registered a ~4% CAGR over FY16-FY23

Revenue ($ mn) YoY (%)