Tata Technologies’ Q1FY26 performance failed to impress, with revenue and margin trends pointing to a soft start to the fiscal year. Global brokerage Goldman Sachs, which maintains a ‘Sell’ rating and a target price of ₹560, called the quarter “in line” on the top line but flagged a deeper-than-expected miss on profitability.
In Q1FY26, Tata Tech reported a 3.2% sequential decline in revenue at ₹1,244.3 crore, while net profit fell 9.9% QoQ to ₹170.3 crore. EBIT margins came under significant pressure, slipping to 13.57% from 15.73% in the previous quarter—a contraction of over 200 basis points.
Goldman noted that constant currency (CC) revenue was down 4.6% quarter-on-quarter, with core services revenue declining by 5.3% QoQ. The sharp margin erosion was attributed to negative operating leverage stemming from revenue softness.
Management remains optimistic about a sequential pickup in Q2FY26, citing improved customer engagements and new business wins in June after a tepid April and May. Importantly, Tata Tech emphasized that its growth guidance is not contingent on resolution of tariff uncertainties, offering a degree of reassurance.
Despite this commentary, Goldman Sachs remains cautious. The brokerage continues to view valuation and earnings risks as unfavourable, especially given the company’s exposure to cyclical sectors like automotive engineering. Tata Tech’s stock has also seen limited re-rating, partly due to weak delivery momentum.
