Tata Technologies will hire 5,500 people over three years in anticipation of significant growth led by demand from the electric vehicle and aerospace sectors.
The Pune-headquartered subsidiary of Tata Motors (72 per cent shareholding), which provides engineering and digital services, is looking to expand its headcount by 58 per cent to 15,000within three years, a top company official told BusinessLine while also highlighting a severe shortage of manpower availability.
Warren Harris, Managing Director and CEO, Tata Technologies, said, “We are not opportunity constrained; we are supply constrained. The only challenge we have right now is people. Most of our efforts are focused on building manpower quickly enough to address the exponential growth in demand that we are seeing across manufacturing globally.”
Tata Technologies, which is unlisted, closed FY22 as its best year in history. It recorded 83 per cent growth in net profit to ₹436.9 crore in FY22 as against FY21, while its operating revenue jumped 48 per cent to ₹3,529.6 crore during FY22.
“Our business plan requires that we grow at 15-20 per cent every year and so we anticipate the headcount to grow in line with it. We can bring in optimisation through productivity improvements and through investments in technology accelerators and platforms,” Harris added.
Due to the crunch in manpower availability, Tata Technologies has invested in its in-house university, TTL-TechVarsity, to institutionalise a learning and development culture within the organisation, aligned with the organisation’s business strategy.
“There is a significant shortage of manpower in the industry. As a result, attrition is increasing and we are having to focus much more on building manpower. We have invested heavily in tech varsity and thereby exponentially increased the number of freshers. We are looking for ways to accelerate their introduction to the point of productivity,” Harris added.
Tata Technologies’ suite of electric vehicle solutions and turnkey product development capabilities helped win large deals during FY22. The company says it helped clients reduce product development time by almost 30 per cent.
Business from outside the group
The most notable aspect of the company’s growth in FY22 was the business it generated from outside the Tata Group. The share of captive accounts like Tata Motors and Jaguar Land Rover (JLR) fell to 42 per cent in FY22 from 54 per cent in FY20.
“Of the $473 million (revenue), about $365 million come from outside India. Five to six years ago, 75 per cent of the business was dependent on Tata Group, particularly JLR and Tata Motors. But we have worked hard to improve the non-captive share. The majority growth last year came from outside the group and outside India,” Harris added.
Besides the automotive sector, Tata Technologies is vying for business in other sectors including aerospace and industrial machinery. From 12-13 per cent, the company is expecting non-automotive share to climb to 15-18 per cent in 2-3 years.
The growth, however, will not be charted organically alone. According to Harris, the company’s three-year growth target includes inorganic route.
“Because of our strong balance sheet, we are always on the lookout for acquisitions that can accelerate the capabilities and the presence we have in different skill sets in parts of our portfolio. With the runoff in the financial markets outside of India, asset prices are becoming somewhat realistic. I would anticipate that there are opportunities in the inorganic space that we will look to explore in 12-24 months, within India and outside,” Harris added.