Buy Tata Technologies; target of Rs 1290: ICICI Securities

ICICI Securities research report on Tata Technologies

We attended Tata Technologies’ (TATATECH) analyst meet. The demonstration indicated TATATECH’s prowess in :1) ICE to EV conversion, 2) SDV, 3) smart manufacturing, 4) plant engineering, 5) robotics, 6) AI implementation and 7) battery solutions. Special emphasis has been put on deepening partnership with OEM ecosystem stakeholders to speed up the transition to software/ SDV portfolio. It has also added marquee names to client roster to limit the downside from VinFast ramp-down (in EV, semiconductor, manufacturing domain).

Outlook

We recommend BUY with unchanged TP of INR 1,290 on 1-year forward PE of 56x (in line with lifetime median/average PE). Key risks: Under-penetration in Europe and other verticals being unable to adequately compensate for VinFast’s ramp-down.