Tata Technologies’ Q3 Profit Plunges 96% on One-Time Labour Code Charge
Tata Technologies reported a sharp 96% fall in consolidated net profit for the third quarter ended October–December, mainly due to a one-time exceptional charge linked to India’s newly notified labour codes. The ER&D firm said profit declined to 66.4 million rupees from 1.69 billion rupees a year earlier, marking its biggest profit drop since its 2023 stock market debut.
The company booked an exceptional charge of 1.4 billion rupees after the new labour codes came into effect in November, which increased its gratuity and leave-related liabilities. The updated rules require employee wages to make up at least 50% of cost-to-company (CTC), impacting how benefits such as provident fund and gratuity are calculated.
Despite the setback, Tata Technologies remained optimistic about the upcoming quarter, with CEO Warren Harris stating the firm is “poised for a sharp acceleration in Q4,” forecasting over 10% sequential revenue growth. Revenue rose 3.7% to 13.66 billion rupees, supported by a 4.7% rise in services segment revenue, while technology solutions revenue stayed flat; CFO Uttam Gujrati said margin headwinds from Q3 were behind and margins are expected to return to, and exceed, the Q2 adjusted run-rate.
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