Higher auto spending, aviation bet will push us to $1 billion: Tata Tech’s Harris

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Rising auto expenditure, a new aerospace push, and a target six times faster than anything Tata Technologies Ltd has managed over the last three years: Warren Harris isn't blinking on his $1 billion revenue target by FY28.

In a conversation with Mint on Friday, Harris reiterated his stance on crossing the billion-dollar mark. “It is very much on, and we are still very, very committed to it,” said Harris.

This statement comes after the Pune-based engineering services firm grew by less than 2% on a yearly basis last year after a revenue decline in FY25. Tata Technologies, which designs, manufactures, and manages technology services for transport companies, ended last year with $619.8 million, up 1.5% from the preceding year.

The company had reversed a revenue decline in FY25 to get back to growth, but said the pause in tech spending over the last 18 months was ‘somewhat unique’.

“It's unique because it's been driven by two things. One, the tariffs from the US. I think that has prompted almost every customer to revisit their product portfolio in terms of propulsion system, in terms of supply chain, in terms of where product is built, and so that prompted a delay in investment,” he said.

“We've also seen the tapering of the transition to EVs (electric vehicles), and I think those two things together have prompted this once-in-a-generation pause,” Harris added.

He added that the pause in spending presented an opportunity to get close to the aspirational billion-dollar mark.

“I think what's really exciting for us is that the pause (in tech spending) has prompted a need for our customers to accelerate the development of new products, and that's prompting a greater propensity to outsource,” said Harris, adding that engineering firms have to continue investing in new products or risk “mortgaging the future.”

The company, whose shares have gained 18% this year even as India's largest information technology stocks slumped more than 30%, is also leaning harder into aerospace to offset a slower rebound in its core automotive business, Harris said.

He expects the company to drive double-digit growth in the coming two years.

“When you project from where we were in FY25, we drive double-digit growth this year, and then we drive double-digit growth next year. We think we're going to be very close to that billion-dollar target,” Harris added.

For this, the company would have to grow at a compounded annual growth rate of 27% over the next two years, which is six times the CAGR of 4.3% over the last three years.

Tata Technologies, as the company, gets about four-fifths of its business from car companies. Significantly, the company got a fourth of its revenue from one client, Jaguar Land Rover, which is also its largest client.

Last month, the firm became the first Tata Group firm to increase its exposure to JLR when it sought shareholder approval to raise its business with the car company to about ₹1,750 crore (approximately $180 million) in the current fiscal, accounting for almost a third of its revenue.In September, JLR was hit by cyberattacks that halted operations and services for existing vehicles. It ended last fiscal with £22.9 billion ($30.5 billion) in revenue, down 21% from the preceding year.

However, the management dismissed plans to focus on one client for revenue, making it prone to risk.

“I think if you look at the last three quarters, you will see not only Jaguar Land Rover, but the Tata Motors Group contribution continues to come down, and I think if you look at the business now, you know it's less than 50%,” said Harris, adding that client concentration is reducing.

He added that the company is now doubling down on growth from aerospace companies.

“We've been growing aerospace specifically at a faster rate than automotive, and whilst we see a bounce back of growth in automotive, we expect the growth in aerospace to continue,” ...