TARIL - Investment Analysis

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

Investment Rating: 3.8

📊 Fundamental Analysis of TARIL (Tata Advanced Systems or similar)

✅ Strengths

Exceptional Capital Efficiency

ROCE: 28.0% — top-tier operational efficiency

ROE: 23.4% — strong shareholder returns

Debt-to-Equity: 0.23 — low leverage, financially sound

Growth Momentum

PAT Growth: ₹91.6 Cr vs ₹54.8 Cr — 129% quarterly surge

PEG Ratio: 0.49 — undervalued relative to growth

EPS Growth: ₹7.14 — improving earnings base

Qtr Profit Var: 129% — strong earnings acceleration

Price Action

Above DMA 50 & DMA 200 — bullish trend

RSI: 54.6 — neutral zone, room for upside

MACD: +0.48 — positive crossover

⚠️ Concerns

Valuation Stretch

P/E: 72.0 vs Industry PE: 57.2 — premium valuation

Book Value: ₹41.7 vs Price: ₹509 — ~12x book, very high

Weak Dividend Yield: 0.04% — negligible income for long-term holders

Institutional Sentiment

FII Change: -0.39%

DII Change: -1.18% — both reducing exposure

📉 Valuation & Ideal Entry Zone

Given the high P/E and recent price action

Ideal Entry Zone: ₹460–₹490

Near DMA 200 and psychological ₹450–₹500 support

Offers better risk-reward balance

🧭 Long-Term Investment Outlook

TARIL shows strong growth and capital efficiency, making it a potential long-term candidate, especially in niche or defense-related sectors. However, the valuation is rich, and institutional sentiment is cooling.

Holding Period: 2–4 years

Suitable for growth-focused investors

Monitor earnings consistency and valuation compression

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹600–₹630

Near previous highs and valuation ceiling

Full Exit

If ROE drops below 18%

If PEG rises above 1.2 without EPS growth

If price breaks below ₹450 and fails to recover over 2 quarters

Reinvest: Only if growth metrics remain strong and valuation normalizes

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