- Tata Capital benefits from Tata Group's strong support and access to equity capital
- NDTV Profits offers in-depth equity and economy research from top Indian agencies
- HDFC Securities initiates Tata Capital coverage with an Add and target price of Rs 344
Tata Capital is a part of the Tata group, one of the largest business groups in India. This provides strong support on the liabilities side, as well as access to equity capital. Further, it provides significant opportunities for cross-sell of lending products within the group.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
We initiate coverage on Tata Capital Ltd. with an 'Add' and a RI-based target price of Rs 344 (implying 2.7x Sep-27 adjusted book value per share). Our implied multiple is at 35% discount to Cholamandalam and 23% premium to L&T Finance.
Tata Capital has transitioned into a diversified franchise post pandemic under Mr. Rajiv Sabharwal with high contribution of retail/SME segments.
This has also translated into significantly improved profitability compared to pre-pandemic levels.
Having completed the merger with Tata Motors Finance Ltd. (and the earlier amalgamation of Tata Capital Financial Services Ltd. and Tata Cleantech Capital Ltd. into Tata Capital), the company is poised to deliver steady operating performance during FY26-FY28E backed by a strong brand, growing distribution network and improving operating efficiencies.
However, we expect the growth momentum to moderate during FY26-FY28E driven by increasing base, elevated competitive intensity and enhanced focus on overall profitability.
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