TMPV - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | TMPV | Market Cap | 1,26,948 Cr. | Current Price | 345 ₹ | High / Low | 449 ₹ |
| Stock P/E | 19.2 | Book Value | 66.7 ₹ | Dividend Yield | 1.74 % | ROCE | 20.3 % |
| ROE | 17.9 % | Face Value | 2.00 ₹ | DMA 50 | 359 ₹ | DMA 200 | 397 ₹ |
| Chg in FII Hold | 0.75 % | Chg in DII Hold | -1.95 % | PAT Qtr | -237 Cr. | PAT Prev Qtr | 3,855 Cr. |
| RSI | 43.4 | MACD | -4.05 | Volume | 89,30,099 | Avg Vol 1Wk | 1,16,63,143 |
| Low price | 324 ₹ | High price | 449 ₹ | PEG Ratio | 0.25 | Debt to equity | 0.12 |
| 52w Index | 16.7 % | Qtr Profit Var | -1,680 % | EPS | 245 ₹ | Industry PE | 30.8 |
💰 Financials: Tata Motors (TMPV) shows mixed fundamentals. ROE at 17.9% and ROCE at 20.3% reflect decent efficiency in capital usage. Debt-to-equity ratio of 0.12 highlights a manageable leverage position. However, quarterly PAT dropped sharply to -₹237 Cr. from ₹3,855 Cr., indicating earnings volatility. Cash flows remain supported by strong demand in passenger and commercial vehicles, but profitability is cyclical and sensitive to global markets.
📊 Valuation: Current P/E of 19.2 is below the industry average of 30.8, suggesting undervaluation relative to peers. P/B ratio (~5.2) is high compared to book value of ₹66.7. PEG ratio of 0.25 indicates undervaluation relative to growth prospects. Intrinsic value analysis suggests the stock offers upside potential if earnings stabilize.
🚗 Business Model & Competitive Advantage: Tata Motors is a leading automobile manufacturer with a diversified portfolio across passenger vehicles, commercial vehicles, and electric vehicles. Its competitive advantage lies in brand strength, global presence (including Jaguar Land Rover), and innovation in EVs. However, profitability is impacted by cyclical demand, high input costs, and global competition.
📈 Entry Zone: Considering DMA 50 (₹359) and DMA 200 (₹397), accumulation is attractive in the ₹330–₹350 range. Long-term investors can hold for exposure to India’s automotive growth and EV transition, though earnings volatility must be factored in.
Positive
- Strong ROE (17.9%) and ROCE (20.3%).
- Low debt-to-equity ratio (0.12) ensures financial stability.
- Global presence with Jaguar Land Rover adds diversification.
- PEG ratio of 0.25 indicates undervaluation relative to growth.
Limitation
- Quarterly PAT decline from ₹3,855 Cr. to -₹237 Cr. highlights earnings volatility.
- P/B ratio (~5.2) suggests expensive valuation relative to book value.
- Profitability sensitive to global demand cycles and input costs.
- High competition in EV and passenger vehicle segments.
Company Negative News
- Decline in DII holdings (-1.95%).
- Sharp quarterly profit drop raises concerns about earnings stability.
Company Positive News
- Increase in FII holdings (+0.75%), signaling foreign investor confidence.
- Strong positioning in EVs and passenger vehicles supports long-term growth.
Industry
- Automobile industry P/E at 30.8 indicates Tata Motors trades at a discount.
- Sector growth driven by rising demand for passenger vehicles and EV adoption.
- Global competition and cyclical demand remain key risks.
Conclusion
🔑 Tata Motors is a fundamentally strong automotive company with decent return ratios, low debt, and strong global presence. While earnings volatility and high competition pose risks, its discounted P/E and EV growth prospects make it attractive. Entry around ₹330–₹350 offers a favorable risk-reward balance. Long-term holding is justified for investors seeking exposure to India’s automotive and EV growth story.