TATATECH - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.2

📊 Core Financials Analysis

Revenue & Profitability

Quarterly PAT dipped slightly (₹189 Cr → ₹170 Cr), but overall profitability remains strong.

EPS of ₹16.9 is solid, supporting a healthy earnings base.

Return Metrics

ROCE: 25.8% and ROE: 19.9% — excellent returns, indicating efficient capital use and strong shareholder value creation.

Debt & Liquidity

Debt-to-equity: 0.07 — virtually debt-free, which enhances financial stability and reduces interest burden.

Cash Flow

While not explicitly provided, low debt and high ROCE/ROE suggest robust operational cash flows.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 41.9 Premium valuation vs. industry PE (31.8)

P/B Ratio ~8.02 High, implies market expects strong growth

PEG Ratio 2.67 Overvalued based on growth expectations

Intrinsic Value — Likely below current price due to high multiples

🔎 Valuation Insight: The stock trades at a premium, suggesting high growth expectations are priced in. PEG > 2 implies overvaluation relative to earnings growth.

🏢 Business Model & Competitive Advantage

Sector: Engineering R&D and digital solutions — high-growth, tech-driven space.

Strengths

Tata Group backing ensures credibility and access to global clients.

Strong presence in automotive and industrial verticals.

Low debt and high return ratios make it a capital-efficient business.

Risks

High valuation leaves little margin for error.

Recent profit dip may signal short-term headwinds.

📈 Technical & Entry Guidance

Current Price: ₹707

DMA 50: ₹719 | DMA 200: ₹796 → Trading below both, indicating short-term weakness.

RSI: 44.6 → Neutral zone, not oversold.

MACD: -3.66 → Bearish crossover, signals caution.

🔽 Suggested Entry Zone: ₹640–₹680 This range offers a better risk-reward balance if the stock corrects further.

🕰️ Long-Term Holding Guidance

Hold if already invested, but monitor valuation and earnings growth.

Buy on dips if price approaches intrinsic value or PEG improves.

Ideal for long-term investors seeking exposure to engineering R&D with strong fundamentals and minimal debt.

Would you like a comparison with other Tata Group tech stocks or a deeper dive into its global client base?

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