AXISCADES and Tata Technologies
Table of contents
Clockspeed and the accelerating rate of change
The three fitness landscapes
Business Profiles
Evaluation using Michael Mauboussin’s Lens
Evaluation using Nassim Taleb’s Lens
Evidence of how clockspeed and fitness landscape apply to these two companies?
My investing approach amid uncertainty?
What kind of software companies I like?
Clockspeed and the accelerating rate of change
When we talk about clockspeed, we’re really talking about how fast things move in business: how quickly industries, companies, and products evolve. The big picture here is that business cycles are speeding up. Competitive advantage just doesn’t last as long as it used to.
There are two main types of clock speed:
Product clockspeed is about how fast an industry can bring new products to market and how long those products stay competitive. Michael gave the example of General Motors in his book More Than You Know; they’ve cut their vehicle development time from forty-eight months down to just twenty-one. That’s a huge acceleration.
Process Clockspeed focuses on how quickly a company can create and deliver value; in other words, how fast it turns its investments into returns. If we look at large industrial firms, their average asset life has dropped from around fourteen years in the mid-1970s to under ten years today. That means companies have a much shorter window to recover their investments and make money.
For investors, this faster clock speed changes the rules. It makes traditional valuation methods less reliable, and it suggests that managing portfolios effectively today might require more frequent adjustments than in the past. Hospitals and wider healthcare ecosystem are a sector where I have significant skin in the game. While the industry may appear similar to its pre-COVID state from the outside, the reality is that today—and increasingly in the future—software and robotics will handle the majority of the work. Similarly, in fields such as defence, aerospace, and other precision manufacturing sectors, embedded software will become the true “management” layer driving innovation and efficiency.
Source: More Than You Know
The three fitness landscapes
Now let’s shift to fitness landscapes, a concept originally from evolutionary biology. Biologists used it to explain how species adapt and survive; in business, it describes how companies create value and compete.
Imagine a big landscape filled with hills and valleys. Each point represents a possible strategy, and the height of that point reflects how successful, or “fit”, that strategy is. Companies are constantly exploring this landscape, trying to climb higher to identify the peaks of maximum value creation while avoiding the valleys of decline.
Depending on the industry, this landscape can look very different. Industry mapping may seem simple until one zooms in. For instance, the pharmaceutical “industry” is not just one industry but a collection of many islands, and each of these islands offers a very different landscape, so APIs, branded generics, OTC and gene therapies are completely different industries. We have another couple of dozen such segments making this an incredibly distributed and fragmented fitness landscape. Software is no different. The resources and capabilities vary significantly between process innovators, product innovators, recurring revenue SaaS businesses, and those relying on traditional bespoke SDLC development projects.
We can group them into three main types:
Stable landscapes:
These are relatively flat and predictable, with not a lot of steep peaks or deep valleys. Growth opportunities are limited, and most companies gain an edge through efficiency. The best strategy here is small, incremental improvements—what we call “short jumps”.
Examples include generics, electric utilities, commodity producers, and consumer durables and nondurables.Coarse landscapes:
These are more uneven — change happens, but it’s not total chaos. There’s real potential to outperform competitors, but also a risk of being disrupted by new technologies. Strategy in this space needs a balance of short jumps (incremental improvements) and long jumps (bold, transformative moves).
You’ll see this in industries like financial services, retail, healthcare, and mature tech companies.Roiling landscapes:
These are the wild ones — constantly changing, full of uncertainty and rapid shifts. Peaks rise and fall all the time. To survive here, companies must continuously reinvent themselves, focusing on long jumps – the next big idea or breakthrough. Even if they find success, it’s often short-lived. Adaptation beats optimisation every time.
Examples include novel drug development, software, genomics, fashion, and most start-ups. These companies often use a “strategy as simple rules” approach: flexible guidelines that help managers make quick, decentralised decisions in fast-moving environments.When an analyst presses management for “guidance”, the savvy manager should hear it as “ॐ भवति भिक्षां देहि” — a humble plea for alms. The analyst is essentially asking for “भिक्षां” or “guidance”, and the well-meaning management, wishing to oblige, often offers whatever comes to mind. This well-intentioned generosity can, however, lead to numerous unintended consequences down the line.
The big takeaway here is this: the more dynamic your environment, the faster you need to adapt. In today’s business world, survival and success depend less on perfecting your current position and more on how quickly you can move when the landscape shifts beneath you.
Business Profiles
Alright, let’s talk about two big tech companies: AXISCADES and Tata Technologies, and how they make money, grow, and stay ahead in their fields. Think of them as players in the same sport (engineering and digital services) but with totally different playing styles.
AXISCADES – the “transformer”
AXISCADES is in the middle of a big upgrade to its game plan. Right now, all its profit comes from three main areas:
Aerospace: They help build and maintain aeroplanes, from designing fuselages and repairing wings to setting up AI-driven maintenance hubs. They’re even building India’s most advanced aircraft repair centre.
Defence: They work on tech-heavy military projects – things like drones, radars, and missile systems – and boost India’s own defence programmes like Akash and Pinaka.
ESAI (electronics, semiconductors, AI): This is their “future growth engine”, moving from designing individual chips to building full products with AI, deep learning, and IoT.
Their big shift?
Moving from service work (lots of people doing tasks) to product and IP-led growth (build once, sell many times, higher margins).
Dropping weaker parts of the business, like old automotive and engineering staffing that made revenue but lost money.
Investing in new tech hubs (for defence, aerospace, electronics, and unmanned warfare) to prepare for much bigger goals.
They’ve even named their growth plan “Power 930,” aiming for USD 1 billion in revenue and over 20% margins by 2030.
Tata Technologies – the software-driven builder
Tata Tech works with manufacturers to design, develop, and deliver smarter products—cars, planes, and industrial machines—while pushing them towards a “software-defined future”.
They have two big buckets of work:
Services (most of the cash flow):
Engineering R&D (ER&D): Mixing hardware and software thinking to help create electric cars, upgraded aircraft, and factory machines. They’re known as India’s top auto engineering service provider.
Embedded systems and solutions (ESS): The fastest-growing part is writing the “brains” for modern products, like software-defined vehicles that behave more like smartphones on wheels.
Digital enterprise solutions (DES): Helping companies digitise processes with Industry 4.0 tech, AI, digital twins, and advanced planning systems, all aimed at making manufacturing faster and more flexible.
Technology Solutions:
Education solutions: upskilling people and modernising training institutes with online platforms and partnerships with governments.
Software products: Selling and setting up engineering tools like CAD and simulation software.
Their winning formula?
Making software the centre of product creation, not just a side tool.
Landing huge projects (like a USD 500M+ deal) and strategic partnerships. Top example: a 50:50 joint venture with BMW focused on automotive software.
Using their Global Delivery Execution Model (GDEM) kind of like a relay race across time zones to keep work going around the clock.
Staying financially solid with no debt, strong cash reserves, and steady high profits.
If we put it simply:
AXISCADES is a transformer, rebuilding itself to focus on high-tech defence, aerospace, and AI products, aiming for big future gains.
Tata Tech is already a well-oiled machine, helping global manufacturers build smarter, software-driven products and making money from both services and tech education, while constantly innovating.
Evaluation using Michael Mauboussin’s Lens
So, imagine we’re comparing two tech companies, AXISCADES and Tata Technologies, kind of like you’d compare two sports teams: who’s faster, and who’s better at handling tricky situations?
First, there’s this idea called ‘clockspeed’. It’s basically how fast things change in their industries. AXISCADES works in aerospace, defence, and areas like semiconductors and AI. Those are pretty quick-changing fields with new stuff every couple of years, so they’re moving at a decent speed. But Tata Technologies? They’re into things like software-defined vehicles and embedded systems, racing towards the “software future”. That’s like playing in the fastest league possible, where you have to keep winning short games one after another.
Next is the fitness landscape—think of it like an obstacle course for companies. AXISCADES is changing up its whole strategy, aiming for high-margin, IP-driven growth, but that means taking big, risky leaps in a tricky course. Clearly, that’s higher risk (for higher gains if all works out well). Some parts of their business are losing money, so they’re shifting away from those. Tata’s course? Equally wild, technology is changing super fast with AI and digital stuff blending into physical products, but they seem to thrive in this chaos. They take bold risks and keep innovating, which makes them better at handling change.
Add it all up:
· AXISCADES rating: Good!
· Tata Tech rating: Very Good!
So in our “race”, Tata comes first, and AXISCADES second. Tata wins because they’re playing in the fastest-moving part of the tech world and taking big leaps confidently, while AXISCADES is still in the middle of its transformation.
Evaluation using Nassim Taleb’s Lens
Okay, consider these two companies two distinct types of adventurers. We’ll use ideas from the book Antifragile to determine who can handle chaos and shocks better. Some individuals or businesses not only survive but also grow from their mistakes.
1. Using skills in many worlds (industry-agnostic products)
AXISCADES mostly sticks to aerospace, defence, and electronics. They can use some of their tech in other fields like healthcare or industrial automation, but they’re still very tied to those main areas. So, they’re kind of like a specialist who’s amazing at one sport but not training much in others.
Tata Tech, on the other hand, builds things like software-defined vehicle platforms and AI tools that work across all kinds of industries—automotive, aerospace, heavy machinery—you name it. They even help modernise training institutions. So, they’re more like an athlete who’s good at multiple sports and always flexible.
2. Bouncing back from shocks
AXISCADES has been going through a big internal reboot because some of its older businesses weren’t performing well. That’s like getting a few big injuries and having to rebuild muscle. They’re trying to become tougher, but it’s still a work in progress.
Tata Tech is already quite strong here: no debt, lots of cash, and consistent profits. They even handle multi-year mega projects worth hundreds of millions! That’s like an athlete with great stamina, savings, and focus.
3. Teamwork and Co-Creation
AXISCADES partners with global tech giants and government agencies, working on joint projects to invent new IP. That’s solid teamwork.
Tata Tech takes this to another level. Their collaboration with BMW, for example, creates new products together from scratch. They treat customers as part of one team, and their co-creation projects have even won awards. That’s next-level collaboration.
4. Experimenting and Learning from Mistakes (Tinkering)
AXISCADES is getting into building proof-of-concept products and creating innovation labs—classic tinkering behaviour! They’re learning and taking measured risks.
Tata Tech is a tinkering powerhouse. They host hackathons, build digital twins (virtual testing environments), and experiment constantly: small, safe failures that lead to big discoveries.
5. Balancing Safety and Risk (The Barbell Strategy)
AXISCADES has a solid core business (its safe side) but still holds on to a few struggling segments, like carrying a bit too much weight in the middle instead of balancing both ends of the barbell. .
Tata Tech nails this balance. They play it super safe financially (no debt, strong contracts) and take big, smart bets on AI and new technology. That’s how you win both long-term safety and big opportunities.
Final Tally:
AXISCADES: Good. Should do better with small mistakes, time and learning!
Tata Tech: Very Good!. Keep it up and try for excellence, rather than seeking satisfaction in ‘very good’.
So, if this were a game of Who Thrives Best in Chaos, Tata Tech would win. They’re better at turning surprises, uncertainty, and even shocks into chances to grow stronger, exactly what antifragile is all about. However, what’s relatively antifragile today will surely slip into the land of fragility if they stop innovating or learning from small mistakes. Antifragility is a “North Star” and not a destination like Mt Everest.
Evidence of how clockspeed and fitness landscape apply to these two companies?
Clockspeed describes how fast an industry evolves, pushing companies to constantly adapt and build a series of short-lived competitive advantages. The fitness landscape represents a dynamic, frequently shifting environment that requires strategic flexibility and readiness to pivot.
To analyse any company well, one must deeply understand its industry and invest time in assessing where the business stands today—and, based on solid evidence rather than market noise, estimate where it is likely headed in the next few years.
A strong grasp of management quality is essential, as leadership continuously makes critical decisions. Without ethics, competence, and passion for growth, no meaningful transformation can succeed. For instance, RPG Life’s promoter was happy the way the company was before Mr Yugal Sikri took over. He pivoted the business towards efficiency and new product launches, revamping the manufacturing and R&D infrastructure. All this dramatically improved ROCE and cash flows.
AXISCADES
Clockspeed: industry context & velocity
“AXISCADES’ core domains (aerospace, defence, and ESAI) are in a ‘rapidly evolving’ business landscape.”Clockspeed: innovation cycle
“AXISCADES is focused on non-linear, product- and solution-driven strategies.”Clockspeed: rapid adaptation & investment
“The ESAI vertical transformed from a niche board-design business into a high-margin, system-level growth engine in FY2025. This domain is positioned to drive edge innovation and vertical integration.”Clockspeed: sustained short-term advantage
“AXISCADES is advancing from traditional service delivery to platformisation, repeatable IPs, and ecosystem plays. The Defence roadmap emphasises moving from an engineering service provider to an IP-led product player.”Fitness Landscape: nature of environment
“AXISCADES aims to realign its organisational structure with the rapidly evolving global aerospace, defence-tech, and semiconductor ecosystem.”Fitness Landscape: strategic adaptation
“The company is executing a decisive transformation strategy aimed at strengthening its position as a global engineering and technology enabler. It is resetting or gradually exiting non-core domains (automotive, energy, heavy engineering) that operated at negative EBITDA margins to enhance profitability and synergy with core growth engines.”Fitness Landscape: investment in future capability
“AXISCADES is making bold investments in state-of-the-art infrastructure, including committing ₹180 crores towards near-term investments in FY26. Major projects include the 2.8 million sq. ft. Devanahalli Atmanirbhar Complex (DAC) for defence, aerospace, and strategic electronics.”
Tata Technologies Limited
Clockspeed: Industry Context & Velocity
“TTL’s Core Domains (Automotive, Aerospace, IHM) are being redefined by software. The shift is ‘from traditional hardware-centric development to software-led innovation.’”Clockspeed: innovation cycle
“TTL is investing in scalable Software-Defined Vehicle (SDV) platforms, Gen AI accelerators, smart manufacturing solutions, and embedded software integration.”Clockspeed: rapid adaptation & investment
“TTL’s aerospace business nearly doubled its revenues in FY 2024-25 compared to FY 2023-24. The joint venture with the BMW Group is scaling faster than expected, approaching the four-digit headcount milestone originally projected for end-2025.”Clockspeed: sustained short-term advantage
“TTL secured 17 large deals in FY 2024–25, including one marquee engagement valued at over $500 million, and expanded its base of million-dollar-plus clients to 44.”Fitness Landscape: nature of environment
“TTL notes the decade ahead will be shaped by convergence—between software and hardware, digital and physical, and sustainability and innovation. OEMs face pressure to simultaneously invest in multiple technology platforms (EVs, SDVs, autonomous driving).”Fitness Landscape: strategic adaptation
“TTL introduced a cultural ethos: Bigger. Better. Bolder.” to reflect its ambition to accelerate impact and elevate performance. TTL undertook a corporate restructuring programme aimed at reducing the number of subsidiaries, exiting sub-optimal operations, and de-layering.”Fitness Landscape: investment in future capability
“TTL is expanding its global-local presence, anchored by India delivery and near-shore delivery centres in major ER&D hubs (UK, US, Germany, Sweden, China) to offer agility and intimacy. TTL invested significantly in digital tools and platforms to improve employee engagement, talent acquisition, project management, and process automation.”
Source: all extracts for both companies are from publicly available sources.
My investing approach amid uncertainty?
I explained this yesterday using four companies across three different industries. Please note that the session is behind a paywall.
I know Tata Technologies has disappointed after the initial IPO pop, but the valuations are still not mouthwatering (at least for me). Wait for a serious price correction “or” a milder price correction coupled with a fairly decent time correction. AXISCADES has had a sharp run and obviously needs a pullback along with much-needed sideways movement (time correction).
I am not invested in either of these two companies and currently have no plans to initiate any position in either.
Finally, what kind of software companies I like?
I firmly believe that successful investing means positioning yourself where the market is headed, not where it has been. Historically, IT services companies have delivered substantial returns. However, with AI and machine learning rapidly advancing and these technologies only improving, investors should now prioritise intellectual property-driven businesses with strong operating cash flows. Simply put, I prefer platform and product innovators, with a focus on intellectual property creation, over traditional service models. While AXISCADES and Tata Technologies remain largely service-orientated today, businesses evolve. When leadership is trustworthy, capable, and invested with skin in the game, transformation and execution follow naturally.
