TATAINVEST - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.0

📊 Core Financials Overview

Profitability

ROE: 0.93% and ROCE: 1.09% are extremely low, indicating poor capital efficiency despite a sizable asset base.

EPS of ₹61.1 and PAT of ₹139 Cr show improvement over the previous quarter (₹35.2 Cr), but overall profitability remains weak.

Operating margins are minimal, typical of holding/investment companies.

Balance Sheet Strength

Debt-to-equity ratio: 0.00 — debt-free, which is a major strength.

Book Value of ₹6,086 vs Current Price ₹7,502 → P/B ratio ~1.23, suggesting fair valuation relative to net assets.

Dividend Yield of 0.36% is modest, reflecting a conservative payout policy.

Cash Flow & Stability

PEG ratio of 10.3 indicates significant overvaluation relative to earnings growth.

RSI at 80.4 and MACD strongly positive suggest the stock is in overbought territory, with potential for short-term correction.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 123 Extremely overvalued vs industry PE of 32.0

P/B Ratio ~1.23 Fairly priced relative to book value

PEG Ratio 10.3 Indicates stretched valuation

Intrinsic Value ~₹6,200–₹6,500 Estimated well below current price

Tata Investment Corporation appears significantly overvalued, especially considering its limited earnings power and low return metrics.

🏢 Business Model & Competitive Edge

Sector: Tata Investment Corporation Ltd is a non-banking financial company (NBFC) focused on long-term investments in equity and equity-related securities.

Strengths

Backed by Tata Group, offering credibility and access to high-quality investments

Diversified portfolio across Tata Group companies and other blue-chip stocks

Debt-free structure and conservative financial management

Challenges

Passive investment model limits revenue generation

Low ROE/ROCE and high valuation multiples

EPS growth is inconsistent and not backed by operational expansion

The company functions more like a closed-end fund than an operating business, which explains its low profitability and reliance on market performance for valuation.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹6,200–₹6,500

Below 50 DMA (₹6,832) and closer to intrinsic value

RSI suggests waiting for a pullback before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Suitable for conservative investors seeking exposure to Tata Group equities via a holding structure.

Avoid Fresh Entry at Current Levels: Valuation is stretched; wait for correction or improved earnings visibility.

Watchlist Triggers

NAV growth and portfolio rebalancing

Dividend policy changes

Broader market correction offering better entry

You can explore deeper insights on TopStockResearch’s fundamental dashboard or Invest Yadnya’s business analysis

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