(Reuters) – India’s Tata Technologies reported a bigger-than-expected third-quarter profit, aided by improved demand in its services and technology segments.
Tata Technologies provides engineering and technology services to automobile, aero and heavy machinery makers.
Consolidated profit after tax fell marginally to 1.69 billion rupees ($19.52 million) in the October-December quarter, from 1.70 billion rupees a year ago.
Analysts, on average, expected a profit of 1.61 billion rupees, as per data compiled by LSEG.
Its services segment revenue – which contributes over 78% to the total – grew 1%, while the smaller technology solutions segment grew 6%.
Engineering, research and design (ER&D) services, which include technology support to industries such as transportation and communications, contribute a sixth of the revenue to India’s $254 billion technology sector.
Companies such as Tata Technologies and Tata Elxsi are expected to benefit from the ER&D sector quadrupling to as much as $170 billion between 2023 and 2030, India’s National Association of Software and Service Companies said.
Tata Technologies’ revenue rose 2% to 13.17 billion rupees in the third quarter, slightly ahead of analysts’ estimate of 13.11 billion rupees.
However, total expenses rose 7% as the company spent more on technology upgrades.
Shares of the company closed 0.5% higher ahead of results.
($1 = 86.5810 Indian rupees)
(Reporting by Aleef Jahan and Ashna Teresa Britto in Bengaluru; Editing by Eileen Soreng)
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