🪞At a Glance
Tata Technologies burst onto the stock market like a Diwali rocket – but instead of orbiting like TCS, it’s cruising at a mid-altitude of ₹739, down 35% from its 52-week high. Behind the scenes? Solid margins, BMW bragging rights, and digital engineering buzzwords galore. But does it justify a 44x P/E? Or is this another IPO sugar rush in hangover mode?
🏗️ 1. What They Actually Do – Not Just “Tata Tech = Tech Tata”
- Core Biz: Product development + digital solutions for global auto manufacturers
- Clients: Jaguar Land Rover (anchor), plus a growing list of non-Tata OEMs
- Specialization: Electric vehicles (EV), autonomous systems, software-defined vehicles (SDVs)
- Recent Wins: Designed 2 EVs for a Southeast Asian OEM in FY24
- JV Alert: Strategic partnership with BMW for auto software development in India
📦 Think Infosys meets Bosch, wrapped in Tata credibility.
🧾 2. The Financial Engine – 5-Year Recap
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM (%) |
|---|---|---|---|---|
| FY21 | 2,381 | 239 | – | 16% |
| FY22 | 3,530 | 437 | – | 18% |
| FY23 | 4,414 | 624 | 15.38 | 19% |
| FY24 | 5,117 | 679 | 16.75 | 18% |
| FY25 | 5,168 | 677 | 16.69 | 18% |
📈 Revenue CAGR: 22%
📉 PAT CAGR: 26%
🧠 Surprisingly consistent margins for a service company in a volatile world.
🧮 3. Quarterly Results – Smooth Cruise, But No Turbo
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) |
|---|---|---|---|
| Jun ’24 | 1,269 | 162 | 18% |
| Sep ’24 | 1,296 | 157 | 18% |
| Dec ’24 | 1,317 | 169 | 18% |
| Mar ’25 | 1,286 | 189 | 18% |
🧊 Flatline alert: Revenue is stable, but not scaling like an IT hypergrower.
🔋 Net profit trending up, but in baby steps.
💸 4. IPO to Now – From Fireworks to Fizzle?
- IPO Price: ₹500
- Listing Pop: ₹1,200 on Day 1
- 52-Week High: ₹1,136
- Current Price: ₹739
- Market Cap: ₹30,000 Cr
- 1-Year Return: -29%
🚨 Welcome to the post-IPO fatigue zone. Investors are still adjusting expectations.
📊 5. Return Ratios & Efficiency Metrics
| Metric | Value |
|---|---|
| ROE (FY25) | 20% |
| ROCE | 26% |
| OPM | 18% |
| Dividend Payout | 70% |
| Debt | ₹237 Cr (low) |
| Working Capital Days | 37 (down from 55 in FY21) |
✅ Best-in-class efficiency
🧾 70% dividend payout shows cash is real, not accounting magic
🔍 6. But What’s The Catch?
- 🔼 Valuation:
- EPS: ₹16.69
- P/E: 44.3x (high for a Tier-2 IT player)
- ⚠️ Growth Plateauing:
- FY25 revenue growth = just 1%
- TTM net profit growth = 0%
🤔 Are we overpaying for the Tata surname and BMW mentions?
⚖️ 7. Fair Value Range – Time for Reality
Let’s apply a realistic lens.
- EPS: ₹17 (rounded, FY25 actual)
- Fair P/E Range: 25x (base case) to 35x (bull case)
| Scenario | EPS | P/E | Fair Value |
|---|---|---|---|
| Base Case | ₹17 | 25x | ₹425 |
| Bull Case | ₹17 | 35x | ₹595 |
🎯 EduInvesting Fair Value = ₹425 – ₹595
📉 CMP = ₹739
🚨 Stock is overvalued by 20–40% in most scenarios
🚦 8. Pros and Cons – Quickfire Summary
✅ Pros
- Strong ROE, ROCE
- Tata brand, BMW JV
- High-margin, low-debt
- Export-driven digital services
- Defensive against India IT cyclicality
❌ Cons
- Flat recent growth
- Expensive P/E
- No mega client wins post-IPO
- EV/SDV bets are still early-stage
- High book value multiple (8.4x)
🧠 TL;DR – Great Business, Not-So-Great Price 💰
Tata Technologies is the poster boy for “cool tech stock with Tata DNA,” but underneath the hood, this is a mid-cap engineering services firm with:
- 🚗 Slowing growth
- 💸 Expensive P/E
- 🤖 Hype ahead of fundamentals
It’s not a bad stock. Just not a ₹739 one.
✍️ Written by Prashant | 📅 June 18, 2025
Tags: Tata Technologies review, TataTech IPO, TataTech fair value, BMW JV TataTech, Tata EV engineering, Tata Technologies vs LTTS, undervalued midcap tech, EduInvesting Tata stock analysis
