Global engineering and product development firm, Tata Technologies Ltd., has announced the termination of its ambitious ITI upgrade project in Chhattisgarh. The project, valued at Rs 1,188.36 crore, aimed to develop 36 government Industrial Training Institutes (ITIs) as Centers of Excellence (CoE) across the state. This decision follows a formal communication from the Chhattisgarh government to the company.
Tata Technologies Responds to Project Termination
In response to the government’s decision, Tata Technologies issued a statement confirming the receipt of the termination notice. The company has agreed to initiate the process for refunding the escrow amount related to the project. The Memorandum of Agreement (MoA) for the project was originally signed on July 23, 2023, with Tata Technologies as the lead industry partner responsible for executing the upgrade of the ITIs.
Financial Impact on Tata Technologies
On the financial front, Tata Technologies has seen a slight dip in its stock, closing 1.01% lower at Rs 989.45 per share on Friday. This decline comes amid broader financial challenges for the company, as it reported a 15.4% decrease in consolidated profit after tax (PAT) for the June 2024 quarter. The company’s PAT stood at Rs 162.03 crore, down from Rs 191.53 crore in the same quarter the previous fiscal year.
Revenue and Market Outlook
Despite the project’s termination and the dip in profits, Tata Technologies reported a slight increase in consolidated revenue, which rose to Rs 1,268.97 crore for the first quarter of the fiscal year, compared to Rs 1,257.53 crore in the same period last year. However, total expenses also increased, reaching Rs 1,072.33 crore from Rs 1,035.42 crore.
Warren Harris, CEO and Managing Director of Tata Technologies, remains optimistic about the company’s future. He highlighted that the manufacturing sector continues to invest in alternative propulsion systems, software-defined products, and smart manufacturing, which should benefit the company. Harris also indicated that the company expects sequential revenue growth in its services business to accelerate in the upcoming quarters, driven by a strong order book and positive momentum within key industry sectors such as automotive, aerospace, and industrial heavy machinery.
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