Tata Technologies and BMW Group on Tuesday officially launched BMW TechWork, a 50:50 joint venture with interest in delivering software solutions for enhanced digital experiences. Warren Harris, CEO and MD, Tata Technologies, spoke to FE about the growth prospects of the company.
What kind of revenue boost are you looking for through this JV?
We are still working through a specific business plan. The JV starts on November 1. BMW has tech hubs in Portugal, South Africa, China and Latin America. The ambitions they have here certainly exceeded in size than other hubs.
The auto segment has been under a multi-month slowdown. Do you think companies will go slow on new projects?
Our customers are making investments for next-generation products. Typically, customers invest for programmes that will be released in 3-4 years. So, even though there is a slowdown in sales, typically the investment in product development is not compromised. We have not seen any slowdown in existing projects or demand for our follow-on services. We continue to remain relatively bullish for our prospects for the future.
How was Q2 and how do you see the rest of the year panning out?
One of the things that defined our business in the last two years is the relationship we have with Vinfast. We developed and fully launched two electric SUVs. Vinfast is not investing in new products. So, despite our success, that revenue has dropped. We are largely through that.
What is the current headcount and expectations for the year-end?
We are right now at 13,000, but I cannot give you any guidance for the year because of the blackout period ahead of the company’s announcement of results this month. The JV, which has 100 employees now, may grow to four-digit number by 2025-end.
There has been a steady climb in margins. You ended last year at 18.2%. What’s the guidance on that front?
I cannot comment for the specifics of this year but the North Star for us is about 21-22% — we expect to reach this target in 3-4 years. We have done financial protections against the business growth we expect. We believe 21-22% is imminently achievable.
Tata Motors and JLR generated 34% of the turnover in FY23. How was it in FY24?
In FY24, we got to just over 40% due to the success of these two brands. They got very aggressive in investment for EVs and other alternate propulsion systems. We expect this to continue for two years but it may taper off in medium to long term.
You are working with Agratas for battery tech. How lucrative is the segment?
This is an exciting partnership. Traditionally, we worked on system integration. A third party would work on cell chemistry and the OEM would integrate that with the vehicle and we would do the integration of software and the mechanicals.
Agratas allows us to extend our coverage in the EV value chain. We are now involved in doing pack design for not just four-wheelers but for two- and three-wheelers as well. We are also working on industrialising and digitising the giga factories that Agratas is setting up in Gujarat and the UK.
From: financialexpress
Financial News
