TATAINVEST - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.4
| Stock Code | TATAINVEST | Market Cap | 32,419 Cr. | Current Price | 640 ₹ | High / Low | 1,185 ₹ |
| Stock P/E | 97.3 | Book Value | 622 ₹ | Dividend Yield | 0.42 % | ROCE | 1.09 % |
| ROE | 0.93 % | Face Value | 1.00 ₹ | DMA 50 | 681 ₹ | DMA 200 | 704 ₹ |
| Chg in FII Hold | -0.15 % | Chg in DII Hold | 0.00 % | PAT Qtr | 37.0 Cr. | PAT Prev Qtr | 122 Cr. |
| RSI | 44.8 | MACD | -21.4 | Volume | 5,48,162 | Avg Vol 1Wk | 5,44,106 |
| Low price | 515 ₹ | High price | 1,185 ₹ | PEG Ratio | 8.14 | Debt to equity | 0.00 |
| 52w Index | 18.8 % | Qtr Profit Var | 7.72 % | EPS | 6.59 ₹ | Industry PE | 23.5 |
📊 Analysis: TATAINVEST shows very weak fundamentals for long-term compounding. ROE at 0.93% and ROCE at 1.09% are critically low, indicating poor capital efficiency. The P/E of 97.3 compared to the industry average of 23.5 suggests extreme overvaluation. EPS of 6.59 ₹ is weak relative to price, and dividend yield of 0.42% offers negligible passive returns. PEG ratio of 8.14 highlights growth priced at a steep premium. Technicals show weakness with RSI at 44.8 and MACD negative. The ideal entry zone lies between 520–560 ₹ for margin of safety. For existing holders, exit on rallies near 680–700 ₹ is advisable, as fundamentals do not support long-term compounding.
✅ Positive
- Market cap of 32,419 Cr. provides scale and stability.
- Debt-to-equity ratio of 0.00 indicates a debt-free balance sheet.
- Quarterly PAT growth (+7.72%) shows short-term recovery momentum.
- Book value of 622 ₹ provides some valuation support.
⚠️ Limitation
- Extremely high P/E (97.3) compared to industry average (23.5).
- Critically low ROE (0.93%) and ROCE (1.09%).
- Dividend yield of 0.42% is negligible.
- PEG ratio of 8.14 highlights expensive growth valuation.
- Weak EPS (6.59 ₹) relative to price.
📉 Company Negative News
- Sequential decline in quarterly PAT (37 Cr. vs 122 Cr.).
- MACD at -21.4 indicates bearish sentiment.
- Stock trading at only 18.8% of 52-week index range, reflecting weak momentum.
- FII holdings decreased by -0.15%, showing reduced foreign confidence.
📈 Company Positive News
- Quarterly profit variation (+7.72%) shows some operational recovery.
- Debt-free balance sheet enhances financial resilience.
🏭 Industry
- Investment holding companies benefit from exposure to diversified Tata Group businesses.
- Industry P/E at 23.5 suggests TATAINVEST trades at a steep premium.
- Structural drivers: long-term value creation through group investments, but limited direct earnings growth.
🔎 Conclusion
TATAINVEST earns a rating of 2.4 due to extremely weak ROE/ROCE, expensive valuations, and negligible dividend yield despite being debt-free. Long-term investors should avoid fresh entry unless valuations correct to 520–560 ₹. Current holders should consider exiting near 680–700 ₹ resistance levels. The stock remains a speculative holding company play rather than a strong long-term compounding candidate.