TATATECH - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 4.2

📊 Core Financials Overview

Profitability

ROE: 58.6% and ROCE: 66.9% are exceptional, indicating world-class capital efficiency.

EPS of ₹16.0 and PAT of ₹280 Cr reflect strong earnings, though the −41.7% QoQ drop suggests volatility, possibly due to project timing or cost spikes.

Operating margins remain robust, supported by high-value engineering services.

Balance Sheet Health

Debt-to-equity ratio: 0.05 — virtually debt-free, a major strength.

Book Value of ₹40.8 vs Current Price ₹717 → P/B ratio ~17.6, indicating aggressive valuation.

Dividend Yield of 1.16% adds modest income appeal.

Cash Flow & Stability

PEG ratio of 0.79 suggests undervaluation relative to growth.

RSI at 65.6 and MACD positive indicate bullish momentum, though nearing overbought territory.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 44.8 Overvalued vs industry PE of 32.2

P/B Ratio ~17.6 Premium pricing

PEG Ratio 0.79 Attractive valuation

Intrinsic Value ~₹620–₹640 Estimated ~10–13% below current price

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Tata Technologies appears moderately overvalued, though its fundamentals justify a premium.

🧠 Business Model & Competitive Edge

Sector: Tata Technologies Ltd is a global ER&D (Engineering, Research & Development) services provider focused on automotive, aerospace, and industrial machinery.

Strengths

Deep domain expertise in digital engineering, PLM, and embedded systems

Strong client base including OEMs and Tier-1 suppliers

High solvency score (90/100) and profitability score (57/100)

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Challenges

Recent earnings volatility and high valuation multiples

Analysts forecast a potential price correction, with a 1-year target of ₹622

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Tata Technologies is well-positioned to benefit from the global shift toward electrification, automation, and digital manufacturing.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹620–₹640

Below 50 DMA (₹695) and closer to intrinsic value

RSI suggests waiting for a mild pullback before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and sector tailwinds support long-term growth.

Accumulate on Dips: Especially near ₹630 for better margin of safety.

Watchlist Triggers

EPS recovery and margin expansion

Strategic wins in EV and aerospace verticals

Institutional accumulation and volume breakout

For deeper insights, explore the AlphaSpread valuation dashboard

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or TopStockResearch’s fundamental analysis

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1

www.alphaspread.com

2

www.topstockresearch.com

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