Tata Tech, Tata Elxsi And KPIT Shares Surge After JPMorgan Upgrades — Check Target Price
This comes after JPMorgan issued an upgrade on both Tata Tech and Tata Elxsi from 'underweight' to 'neutral'.
Shares of both Tata Technologies, Tata Elsxi and KPIT Technologies are buzzing in trade on Wednesday after JPMorgan issued a positive call on the entire auto ER&D space, citing demand revival.
Tata Tech leads gains and has surged up to almost 5% in trade on Wednesday while both KPIT and Tata Elxsi have surged more than 3.5%.
This comes after JPMorgan issued an upgrade on both Tata Tech and Tata Elxsi from 'underweight' to 'neutral'.
Target price for Tata Technologies was hiked to Rs 710, up from Rs 570 while the target for Tata Elxsi was hiked from Rs 4,000 to Rs 4,800. The firm also remained 'overweight' on KPIT Technologies, with an unchanged price target of Rs 1,400.
The upgrades come on the back of an improving demand scenario in the auto ER&D space, especially in the course of last three months. Much of this trend has been driven by resolution of large trade deals and tariff concerns.
JPMorgan also highlights that Original Equipment Manufacturers (OEMs) are gradually restart their R&D programs, which were previously put on hold, thus aiding the prospects of these aforementioned comapnies.
Ongoing investments are being largely fueled by hybrid vehicles and autonomous driving systems, as well as connected car technologies. That said, the electric vehicle segment remains sluggish and is yet to see any kind of meaningful recovery.
The recovery, in fact, is geographically uneven, with the European Union leading the resurgence followed by the Asia-Pacific regions. At the same time, the United States continues to lag, with the firm noting that any kind of bounce back is still at least two quarters away.
Therefore, the trend favours firm with strong European exposure, such as KPIT Tech, Tata Tech and Tata Elxsi, at least compared to companies that are more US-focused, such as L&T Technology Services.
JPMorgan expects revenue growth for these Indian ER&D firms to accelerate in the late fiscal year of 2026 and early 2027, aided by the ramp-up of deals secured in 2025.
