TATATECH - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:02 am

Swing Trade Rating: 3.6

📊 TATATECH presents a moderately favorable outlook for swing trading. The stock is priced at ₹654, trading below both its 50 DMA (₹674) and 200 DMA (₹725), indicating short-term weakness. RSI (36.2) suggests oversold conditions, while MACD (-9.81) confirms bearish momentum. Fundamentals are strong with ROCE (66.9%) and ROE (58.6%), supported by low debt (0.05) and a healthy dividend yield (1.29%). Valuations are slightly stretched with a P/E of 40.1 vs industry 31.6, but PEG ratio (0.71) indicates attractive growth-adjusted valuation. Profitability has weakened sequentially (PAT ₹133 Cr. vs ₹280 Cr.), which tempers sentiment.

✅ Optimal Entry Price: Around ₹640–650, near support levels.

🚪 Exit Strategy: If already holding, consider exiting near ₹700–720 (resistance zone) or on weakness below ₹630.

Positive

• 💡 Strong ROCE (66.9%) and ROE (58.6%) highlight excellent capital efficiency.
• 💡 PEG ratio of 0.71 suggests attractive growth-adjusted valuation.
• 💡 Low debt-to-equity (0.05) ensures financial stability.
• 💡 Dividend yield of 1.29% adds investor appeal.

Limitation

• ⚠️ Trading below DMA levels signals weak technical momentum.
• ⚠️ High P/E (40.1) compared to industry average (31.6).
• ⚠️ Sequential PAT decline from ₹280 Cr. to ₹133 Cr.
• ⚠️ DII holdings decreased (-0.43%), showing weaker domestic institutional support.

Company Negative News

• 📉 PAT dropped significantly quarter-on-quarter.
• 📉 Weak technical indicators with MACD negative and RSI near oversold.

Company Positive News

• 📈 FII holdings increased (+0.38%), reflecting foreign investor confidence.
• 📈 Strong efficiency metrics with high ROCE and ROE.
• 📈 Dividend yield adds stability for investors.

Industry

• 🏭 Industry P/E at 31.6 highlights TATATECH’s premium valuation.
• 🏭 Engineering & technology services sector remains in demand, supported by digital transformation and automotive innovation.

Conclusion

🔎 TATATECH is a moderately suitable candidate for swing trading. Entry near ₹640–650 offers a favorable risk-reward setup, while upside is capped around ₹700–720 due to weak technicals and sequential profit decline. Best suited for cautious traders seeking rebounds supported by strong fundamentals and growth-adjusted valuation.

I can also compare TATATECH’s swing trade potential with other engineering service peers to highlight relative opportunities.