Tata Tech CEO On Strategies Post Bumper Listing
#BQExclusive | #TataTechnologies shares list at premium of 140%.
CEO Warren Harris talks about business landscape and growth strategies. #BQLive #BQStocks
CEO Warren Harris talks about business landscape and growth strategies. #BQLive #BQStocks
Transcript
00:00 The Tata Technologies IPO set several records over the three-day period, record applications,
00:06 subscription of 70 times.
00:08 The Tata Technologies listing that happened earlier today was a blockbuster.
00:12 To use a film metaphor, you can say a brilliant first day, first show.
00:16 To talk to us more about this is Mr. Warren Harris.
00:19 He's the CEO of Tata Technologies.
00:21 Mr. Harris, welcome to us.
00:24 Thank you for the opportunity to speak to you, Chusha.
00:27 So first reactions on the listing?
00:30 Well, we're incredibly humbled by the response of the markets.
00:34 I think it's a testament to the company that we built, the value proposition that we represent.
00:40 But it's also a reinforcement of the trust that exists in the Tata brand.
00:45 And so we are very, very gratified.
00:47 Okay.
00:48 Were you expecting this response?
00:49 500 rupees, the IPO price at the top, what we have seen so far is 1400 rupees.
00:54 That's about a 180% jump.
00:56 Were you expecting that?
00:57 Well, the banks had suggested that we were going to generate a lot of interest, but I
01:01 think this has exceeded all of our expectations.
01:03 Okay.
01:04 Would you like to comment on some of the large investors that may have come in through the
01:07 QIB or the MIA route?
01:10 Any picture on that?
01:11 Well, all I'll say is that in building the book and in soliciting the feedback from the
01:20 roadshow, we were really, really pleased with the quantum commitment that we received from
01:27 investment investors, but also the quality of commitment from the investment community.
01:32 Not only did we receive commitments from blue chip institutions here in India, but we received
01:40 them globally and from all sectors of the financial markets.
01:46 So again, a tremendous testament to the company and to the Tata brand.
01:52 All right.
01:53 Listing is done.
01:55 Now, what can you investors and shareholders expect from you in terms of earnings?
01:59 Are you going to give growth guidance?
02:01 Are you going to spell out your order book?
02:05 What can investors expect from you here on, at least, say for example, in the next six
02:08 months?
02:09 It's a fair question, but as a group, we do not provide guidance in terms of revenue or
02:14 indeed margins.
02:16 We will share with the investors our strategy.
02:20 We'll share with investors the key wins.
02:25 We'll share the opportunities that we expect to intersect with, and obviously, we'll be
02:30 completely transparent in terms of financial results.
02:33 So we'll provide, we believe, the basis on which all investors will be able to make good
02:38 sound decisions going forward.
02:41 You are unique in a niche segment of the ERD space itself.
02:46 You own the entire ecosystem from the drawing board to the showroom floor of a product,
02:51 of an automobile that is there.
02:55 How do you see, in comparison to your competition, how do you see the growth coming in?
03:01 I'm speaking in the sense because KPIT, which is very close to your campus in Pune, so they
03:06 have guide for 37% here on your growth in constant currency terms.
03:10 The LTTS also gives a guidance, as well as Tata Electricity also gives a guidance.
03:15 So are you going to be industry matching or do you think you're going to exceed these
03:21 growth numbers?
03:22 Well, if you look at the growth rates from KPIT and LTTS, there's an inorganic component
03:30 to their growth rates.
03:33 I think organically, I think our growth rates are going to be comparable with what's expected
03:39 from the market.
03:41 And to your point about our value proposition, we are a very different company than many
03:47 of our competitors here in India.
03:49 For instance, we're not an India out company.
03:52 Our focus is on, as you say, the end-to-end coverage of the automotive and aerospace value
03:59 chains.
04:01 We have a reputation in terms of being able to develop full turnkey products.
04:07 That requires a balanced onshore/offshore proposition.
04:10 When you're entrusted to develop a complete vehicle, a complete electric vehicle, for
04:15 instance, you've been entrusted with the family jewels of that manufacturing company.
04:19 And so customer intimacy is very important to us.
04:23 And so we expect to continue to build out capabilities in different parts of the world,
04:29 as well as continue to invest in offshore locations like India.
04:33 So we're a different company when it comes to competition.
04:37 We're not just competing with the Indian ESPs.
04:40 We're competing with the German and the French and the North American ESPs.
04:44 And we think that this balance between onshore and offshore is going to be very important
04:47 to us.
04:48 And we're going to continue to do that.
04:49 And we're going to continue to do that.
04:50 And we're going to continue to do that.
04:51 And we're going to continue to do that.
04:52 And we're going to continue to do that.
04:53 And we're going to continue to do that.
04:54 And we're going to continue to do that.
04:55 And we're going to continue to do that.
04:56 And we're going to continue to do that.
04:57 And we're going to continue to do that.
04:58 And we're going to continue to do that.
04:59 And we're going to continue to do that.
05:00 And we're going to continue to do that.
05:01 I'm curious about your thoughts on WinFast.
05:02 So the company listed in August threw a SPAC in the US.
05:06 Their share price is down 90% since then, as of now, as of today, or recently.
05:11 So is there going to be a material impact on Tata Technologies, given that it's one
05:16 of your key clients?
05:18 Well, WinFast is a great company.
05:22 They're a company that was launched in 2016.
05:25 They built a manufacturing facility through reclaimed land from the South China Sea.
05:31 They built two top hats on the BMW 5 Series platform and achieved a market-leading position
05:38 in Vietnam by 2019.
05:41 And they've invested now in four electric vehicles that they are selling in different
05:45 parts of the world.
05:47 I think there's been a great deal of volatility in the EV space as it pertains to the financial
05:52 markets.
05:53 And certainly, WinFast have been the victim of that.
05:57 But we believe in the company.
05:59 We believe in the partnership.
06:00 We fully expect to continue that partnership after the completion of the two vehicles that
06:05 we're currently responsible for.
06:07 I think there will be some volatility in terms of the relationship, because I think WinFast,
06:13 like all new energy vehicle companies, once they've completed the development of a collection
06:19 of vehicles, their focus is going to pivot towards building those vehicles and selling
06:23 those vehicles.
06:24 But they're building out manufacturing capacity in North America.
06:28 That will require that they continue to invest in growing the portfolio.
06:33 We fully expect to be part of that.
06:34 All right.
06:35 Finally, a last question.
06:37 What can we expect as the next big thing from you that makes you stand apart, or the next
06:42 big thing for you, so to speak?
06:45 Well, I think if you look at the opportunities that we are targeting right now, we're continuing
06:51 to develop our capabilities in support of how the automotive industry is pivoting towards
06:58 autonomous connected electrification and shared.
07:01 So that will continue to dominate, I think, our focus in terms of investment and in terms
07:06 of skill building.
07:07 But aerospace is going to be a big part of our future.
07:12 We've been empaneled by Airbus.
07:14 We've been opening offices in Toulouse and Hamburg, which is a complement to the office
07:19 that we have close to Bristol in the UK.
07:24 We've been rolling out the IT systems, going through the accreditations that are required
07:28 in the aerospace industry.
07:29 It's a very regulated industry.
07:32 But we really think that revenues not only will start to flow this fiscal year as we
07:36 move towards the end of Q4, but as we go into next year, aerospace revenues will grow somewhat
07:43 exponentially.
07:44 And that will be reinforced by the investments that the group are making.
07:48 The acquisition of Air India, the procurement of 470 single aisle and wide body aircraft
07:55 will provide tailwinds for us that we expect to intersect with.
07:59 All right.
08:00 Thank you so much for talking to us, Mr. Harris.
08:03 Congratulations again on the listing and all the best for the future.
08:05 Thanks, Trushal.
08:06 Much appreciated.
08:07 Thank you.
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