A 96% profit slump underscores how India’s new labour codes are reshaping cost structures for engineering and tech firms in the short term. (BizTrendWire Insight)
Source: Reuters (via feed)
India’s Tata Technologies said its third-quarter profit plunged by 96% on a one-time charge tied to new labour codes.
The engineering research and development firm posted a consolidated net profit of ₹66.4 million for the October-December quarter. This compared with ₹1.69 billion in the year-ago period, marking its largest profit drop since listing in 2023.
The company booked an exceptional charge of ₹1.4 billion in the period. This was linked to India’s newly implemented labour codes, which came into effect in November.
Under the revised rules, employee wages must account for at least half of the total cost to company. Benefits like gratuity and leave liabilities are now based on wages.
Despite the profit decline, Tata Tech’s total revenue rose 3.7% to ₹13.66 billion in the quarter.
The company serves global clients including Jaguar Land Rover and Tata Motors.
Tata Tech’s chief executive said the firm expects sequential revenue growth of over 10% in the fourth quarter.
