Shares of Tata Technologies were in red on Friday morning after brokerages maintained bearish calls and slashed target prices for the Tata Group company after its Q1 results.

What Happened: In its June quarter results, Tata Technologies reported a 15.4% decline in its net profit to ₹162.03 crore. Its operational revenue rose slightly to ₹1,268.97 crore from ₹1,257.53 crore from the previous year. Sequentially, net profit rose 3.1% while revenue fell 2.5%. 

EBITDA fell 7.7% year on year to ₹231.1 crore while the EBITDA margin declined to 18.2% from 19.9% in the previous year. 

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Brokerage Views: Goldman Sachs maintained a "sell" call on the stock and cut the target price to ₹950. The brokerage said the Q1 results were a miss with revenue and EBITDA coming below consensus. 

The softness in the results was the phasing of customer business in the smaller technology solutions segment. The brokerage added that the softness could also be attributed to Vinfast customer-related quarter-on-quarter moderation in revenue in core services of the auto business. Going forward the management expects the business to return to sequential growth in the rest of the quarters in FY25.

Kotak Institutional Equities also maintained a “sell” call and cut the target price to ₹650 from ₹700. The research firm also cut the earnings per share estimates by 12-15% over FY25-27. It said Tata Tech has a high dependence on anchor clients who contribute 47% of the services revenue, moderate capabilities in digital and embedded engineering and limited scale of relationship with non-anchor clients.

Price Action: Shares of Tata Technologies fell 1.29% to ₹996.15 on Friday morning.

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