Tata Tech trades lower after Chhattisgarh government cancels MoA to upgrade 36 ITIs

The company executed the agreement on July 22, 2023, for upgrading 36 ITIs as Center of Excellence (COE) in the State of Chhattisgarh. However, the Government of Chhattisgarh’s authorised representative, the director of Employment and Training canceled the project worth ₹1,188 crore.

Tata Technologies had emerged as the industry's leading partner to upgrade the ITIs. The collaboration aimed to offer various courses and technical workshops.

The Government of Chhattisgarh informed Tata Tech about the termination of the MoU and the closure of the project as the government is exploring alternate options to meet the project objectives. The company accepted the termination of the MoA and has initiated the steps for the refund of the escrow amount.

Tata Tech recently announced the incorporation of BMW TechWorks India (BTIPL), a wholly-owned subsidiary of the company. BTIPL will support the BMW Group in engineering premium products, delivering digital experiences, and other software-defined-vehicle (SDV) solutions.

In Q1FY25, Tata Technologies reported a 15.4% year-on-year (YoY) decline in its net profit to ₹162 crore. The company’s consolidated revenue from operations grew marginally by 0.9% YoY to ₹1,269 crore.

The company’s operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter declined 7.7% YoY to ₹231 crore. During the quarter, the company’s net profit margin declined to 12.8% from 15.8% in the corresponding period last year while the operating EBITDA margin contracted to 18.2% from 18.4% in the same period last year.

Shares of the company have declined by nearly 16% since the beginning of the year. The stock has lost over 25% in the past year.