Tata Technologies stock gets target price upgrade from Citi, down 20% from record high

Tata Technologies stock, which listed with a premium of 140 percent at Rs 1,200, is currently down 20 percent from its all-time high of Rs 1,400.

Tata Technologies shares fell over a percent on September 9 even as international broking firm Citi maintained its 'Sell' rating on the stock but raised the target price to Rs 945 from Rs 935. The upward revision is based on marginally higher estimates for FY25E-27E, and a positive outlook.

The target multiple for the stock has been adjusted to 42x from 40x, reflecting the rerating in the Indian market and sector, it said. While the company’s growth potential remains strong, driven by resilient tech spending in the automotive vertical, Citi has factored in uncertainties surrounding VinFast revenues and client concentration risks.

ICICI Securities has issued a 'buy' recommendation for Tata Tech, setting a price target of Rs 1,290 based on a 1-year forward P/E of 56x, aligned with its historical median.

The brokerage noted risks, including under-penetration in Europe and challenges in other sectors, which may not fully offset the decline in VinFast's contribution. The brokerage kept its price target unchanged following the analyst meet.

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ICICI Securities highlighted Tata Tech’s capabilities in key areas such as ICE to EV conversion, software-defined vehicles (SDV), smart manufacturing, plant engineering, robotics, AI implementation, and battery solutions. The company is focusing on strengthening partnerships within the OEM ecosystem to accelerate its shift towards a software and SDV portfolio.

Additionally, Tata Tech has expanded its client base with prominent names in the EV, semiconductor, and manufacturing sectors, helping mitigate risks from the VinFast ramp-down (in EV, semiconductor, manufacturing domain).

Meanwhile, JM Financial has identified Tata Technologies as the most attractively valued among the three auto-focused ER&D players, compared to KPIT Technologies and Tata Elxsi.

The brokerage views Tata Technologies as a compelling investment opportunity, particularly with the decline in VinFast (a key customer) behind and promising new deals with BMW-JV and Agratas on the horizon.

JM Financial has a 'buy’ call on Tata Tech with a price target of Rs 1,250. It believes the current Tata Technologies levels offer a good entry point to play the broadening total addressable market (TAM) led growth narrative.

Also Read | Buy Tata Technologies; target of Rs 1290: ICICI Securities

Tata Tech shares ended over 3 percent higher at Rs 1,109.35 on the National Stock Exchange (NSE) in the previous session. The stock has fallen around 6 percent so far this year, underperforming Nifty's returns of 16 percent. The stock, which listed with a premium of 140 percent at Rs 1,200 apiece, is currently down 20 percent from its all-time high of Rs 1,400.

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