Archive · 30 Sep 2026
Brokerage Sees ER&D Recovery, Names Tata Tech, Cyient Picks
ICICI Securities thinks some engineering and technology companies may start recovering in Q2.
It especially likes Tata Technologies and Cyient.
Cyient may grow because of a new acquisition and stronger semiconductor work.
Tata Technologies may benefit from aerospace projects and new business deals.
L&T Technology Services is also expected to improve as an old low-margin business has been removed.
Tata Elxsi and KPIT Technologies may grow slowly or decline because car companies are being careful with spending.
The brokerage also sees risks from Middle East tensions, weak car demand and artificial intelligence lowering prices.
It expects the broader group to gain momentum through FY27, but recovery could take longer than expected.
ICICI Securities expects a recovery in engineering, research and development stocks during Q2, with Tata Technologies and Cyient among its top picks.
Cyient’s dollar revenue is forecast to grow 4.5% quarter-on-quarter to about $170 million, aided mainly by the Tao Digital acquisition.
Tata Technologies is expected to grow 2.7% in dollar terms, while L&T Technology Services is projected to grow 2%.
Tata Elxsi and KPIT Technologies are expected to post weaker performances because of cautious automotive spending and software-related pressures.
Key risks include Middle East tensions, weak European and US automotive demand, AI-led deflation and a muted outlook from major automotive manufacturers.
- Who
- ICICI Securities and the engineering, research and development companies it covers, including Tata Technologies, Cyient, L&T Technology Services, Tata Elxsi and KPIT Technologies.
- What
- ICICI Securities has forecast mixed Q2 performance for ER&D stocks and identified Tata Technologies, Cyient, IKS Health, Indegene and Netweb Technologies as top picks.
- When
- The outlook concerns Q2 and the broader FY27 period; the articles do not specify the calendar year for Q2.
- Where
- The companies operate across markets including aerospace, automotive, semiconductors, healthcare and industrial technology; no single event location was specified.
- Why
- The brokerage expects support from aerospace activity, semiconductor work, acquisitions, new contracts and improving engineering demand, while warning of automotive weakness, geopolitical tensions and AI-related pricing pressure.
Recovery and Growth Drivers
Risks and Caution
Overall ER&D outlook
Recovery and Growth Drivers
ICICI Securities expects the wider ER&D group to gather momentum through FY27, supported by aerospace, semiconductors, sustainability, engineering intelligence and new contracts.
Risks and Caution
The recovery may be prolonged because of weak automotive demand, geopolitical disruption, delayed spending and a potentially muted 2026 outlook from major automotive manufacturers.
Automotive demand
Recovery and Growth Drivers
Tata Technologies is supported by anchor clients, a Tenneco deal, a Japanese OEM opportunity and its BMW-led joint venture; L&T Technology Services also expects improved automotive demand.
Risks and Caution
Volkswagen’s slowdown may affect Tata Technologies, weak European automotive demand may weigh on L&T Technology Services, and cautious OEM spending is limiting Tata Elxsi’s growth.
Technology and acquisitions
Recovery and Growth Drivers
Cyient’s Tao Digital acquisition, semiconductor push and a semiconductor fab modernisation deal are expected to support growth; acquisitions may also help KPIT Technologies.
Risks and Caution
KPIT Technologies’ software-heavy, software-defined-vehicle portfolio is considered vulnerable to AI-led deflation, while integration costs are expected to reduce Cyient’s margin.
- Brokerage
- ICICI Securities
- Cyient forecast
- 4.5% quarter-on-quarter dollar-revenue growth to about $170 million
- Tata Technologies forecast
- 2.7% dollar-revenue growth, or 3.2% in constant currency, to about $180 million
- L&T Technology Services forecast
- 2% dollar-revenue growth to about $316 million
- Tata Elxsi forecast
- 0.6% dollar-revenue growth to about $108 million
- KPIT Technologies forecast
- 0.7% decline in dollar revenue to about $175 million
- Top picks
- Tata Technologies, Cyient, IKS Health, Indegene and Netweb Technologies India