India has the potential for exporting a lot of electric vehicles going ahead, given its competitive advantage. “Given that it is a price-sensitive market, India has the potential to establish something that it relevant to the world,” said Warren Harris, the chief executive officer and managing director of Tata Technologies. The engineering technology company, promoted by Tata Motors, is set to hit the primary markets next week. Following are the edited excerpts of an interaction with Nikita Periwal:
Given that a public offering of Tata Technologies has been in talks for a while now, what was the rationale for the timing?
It is an offer-for-sale, so the transaction is primarily driven by the needs of our promoter Tata Motors and Jaguar Land Rover, who are looking to become net debt-free. As a company, we are looking at this as an opportunity to develop our profile through the exercise of going public. It will be helpful, particularly as we look to attract and retain the best engineers in the market.
What is the profile development you are looking at?
As a public company, you enjoy a much higher profile in terms of brand awareness, while having financial markets talk about you. That ensures that our company is on top of the mind when customers and engineers are looking for either services or a career.
How do you plan to change the current client concentration and what will be the focus areas going ahead?
Last year, Tata Motors and JLR together accounted for less than a third of our business. We have been building our business with their support, but increasingly outside of the group. We are supporting 33 traditional OEMs, and our ambition is to be more strategic and relevant to these companies. We are confident of being not just a service provider to these companies, but we can actually take ownership over certain parts of their portfolio. As technology continues to accelerate, more and more companies are going to be looking outside to get the skills they need, and that position is a great opportunity for companies like us.
Which are the key markets for you from a consumption perspective?
China has the lead on everyone as far as the penetration of electric vehicles is concerned. Europe is playing catch-up, so it can be a great market for engineering services. I am really bullish on India given the way digital has pervaded the society here. Given that it is a price-sensitive market, India has the potential to establish something that it relevant to the world, so there can be a lot of exports from India, particularly in the EV space, given their competitive advantage.
Tell us a little about your people strategy.
In the last three years, we have been recruiting about 2,500 – 4,500 people each year. About five years ago, we realized that we cannot steal talent, and so we have invested in an internal university, and an e-learning platform. Because of our partnership with Tata Motors, we can also take our graduates and rotate them through Tata Motors’ facilities, which provides a unique experience for the engineer.
What is the difference when you pitch yourself to clients with a strong brand like Tata Motors backing you?
When we competed for business outside the Tata Motors group 10 years ago, there was always concern from Tata Motors and JLR’s competitors that confidentiality could be compromised. As the industry is changing and technology is becoming more of a driver, the industry is putting aside these concerns, and focusing on capability.
Are you working with manufactures of chips for designing specific solutions?
If you look at it in terms of software, this is the brain that will define functionality in vehicles going forward. There are chip manufacturers, middle ware players and protocol players. In order to be relevant in this space, one needs to have strategic partnerships with all of these players.
Is there a demand from global ER&D companies?
We are seeing that European and North American companies are certainly looking at India to satisfy their headcount growth plans. It will not be unreasonable for me to say that if you don’t have a nexus in India, you are not going to be relevant going out. You have to have a presence here. I think the trajectory of the industry will position India as the focal point of future growth.
