Tata Technologies Limited

Technology — Information Technology Services · NSE

₹720.00−₹21.25 (−2.87%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with modest growth. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of Tata Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Tata Technologies Limited provides product engineering and digital services in India, the United Kingdom, North America, rest of Europe, and internationally.

IndustryInformation Technology Services

SectorTechnology

Employees11,529

Annual revenue₹5,506 Cr

How does it make money?

Turns over ₹5,506 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 11,529 employees supports ₹47.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹47.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What is the outlook?

15 analysts covering the stock expect revenue to grow about 12.7% and earnings to grow about 22.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.7%

Est. earnings growth+22.3%

Analysts15

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +25% while net margin moved -30% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+25%

Margin effect-30%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 7.7% — barely ahead of inflation
✗ Profit has declined at 4.3% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

54/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

32/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

51.9x

3Y Median

47.1x

37 monthly readings · mean 52.1x · range 30.6x–85.4x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 10% above its 3y median of 47.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 214% above the peer median of 16.5x.

vs. its own history

Fair

47.1x median over 37 months · +10%

vs. sector peers

Expensive

16.5x median of 4 peers · +214%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

28.6x

PEG

15.28

What's Good / What's Bad

🟢 What's Going Well3

Cash generation is improving
Free cash flow is up 121% over 3 years.
Very low debt
Debt/Equity of 0.29x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 20.9% to 13.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.2% to 15.5% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 267% over 3 years, from ₹255 Cr to ₹938 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹742 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 214% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 7.7% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 20.9% to 13.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 18.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 6% a year✓ 7.7% CAGR
Latest reported year was 28.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹742 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹29,236 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

51.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.63x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹13.86

Profitable

Profitable on a per-share basis

ROE

15.2%

Strong

Strong capital efficiency

ROCE

15.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

28.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

3.4%

Modest

Slow profit growth

Dividend Yield

1.16%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹332 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

31.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

6.4%

Average

Average asset productivity

Operating Margin

12.9%

Average

Average margins

Net Margin

8.9%

Average

Average bottom-line conversion

Current Ratio

1.48

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.89

Market-like

Moves roughly in line with the market

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

714.0 / 773.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,413 Cr	₹5,113 Cr	₹5,168 Cr	₹5,506 Cr	+7.7%
EBITDA	₹887 Cr	₹1,010 Cr	₹1,041 Cr	₹1,031 Cr	+5.2%
EBITDA Margin	20.1%	19.8%	20.1%	18.7%	—
PAT (Net Profit)	₹624 Cr	₹679 Cr	₹677 Cr	₹547 Cr	-4.3%
EPS	₹15.38	₹16.72	₹16.66	₹13.47	-4.3%
ROE	20.9%	21.1%	18.9%	13.9%	—
ROCE	25.2%	27.5%	23.6%	15.5%	—
Total Debt	₹255 Cr	₹257 Cr	₹237 Cr	₹938 Cr	+54.3%
Free Cash Flow	₹336 Cr	₹203 Cr	₹668 Cr	₹742 Cr	+30.3%

🟢 Revenue has grown at 7.7% a year over 3 years.

🟢 EBITDA has grown at 5.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.1% to 18.7% over 3 years (-1.4 pts).

🔴 PAT (Net Profit) has shrunk at 4.3% a year over 3 years.

🔴 EPS has shrunk at 4.3% a year over 3 years.

🔴 ROE has fallen from 20.9% to 13.9% over 3 years (-6.9 pts).

🔴 ROCE has fallen from 25.2% to 15.5% over 3 years (-9.7 pts).

🔴 Total Debt has grown at 54.3% a year over 3 years.

🟢 Free Cash Flow has grown at 30.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,953 Cr

Total Liabilities

₹5,030 Cr

Cash & Equivalents

₹682 Cr

Operating Cash Flow

₹776 Cr

Capex

-₹34 Cr

Shareholding (proxy)

Institutional Holding

7.8%

Insider Holding

60.1%

Corporate Actions

Dividend Rate

₹8.35

Ex-Dividend Date

18 Jun 2026

Analyst Consensus

Recommendations

4 Buy · 3 Hold · 7 Sell

Target Price (Mean)

₹756.36

+5.0% vs CMP

Target Range

₹535 – ₹1,340

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

6 mixed

Tata Technologies Share Price Falls 2.28%: Valuation Watch

Univest, 17 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Tata Elxsi vs Tata Tech: Which Tata Group's stock wins Q2 results report card? Profit, revenue compared - Target price

TradingView, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Tata Tech shares rally 8% after Q2 results, but Goldman Sachs and JM Financial stay bearish. Here's why

The Economic Times, 15 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Tata Technologies' premium valuations limit upside despite Q2 growth

Business Standard, 15 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Tata Group stock could fall 25% after Q2 results, bearish analysts warn; Stock gives up gains

CNBC TV18, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Tata Technologies shares slip 5% as Q2 earnings fall below estimates

Business Today, 15 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Risk

MiddlingBusiness Quality · Profitability

WeakGrowth · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑