Tata Technologies Q1 Results: Should You Buy or Sell the Stock? PL Capital View
- 15th July 2025
- 03:00:00 PM
- 3 min read
Mumbai | July 15 – Tata Technologies share price edged over 2% higher in early trade on Tuesday after reporting its Q1FY26 results, despite sequential pressure on revenue and margins. Investors are now asking: Should you buy or sell Tata Technologies stock? Here’s the PL Capital view.
Revenue and Margins Under Pressure
Tata Technologies reported a 2% QoQ decline in USD revenue to $145.3 million, while consolidated INR revenue fell 3.2% to ₹1,244 crore, reflecting delays in project ramp-ups in the automotive segment and macro uncertainties. Services revenue, which forms 77% of the mix, dropped 7.6% QoQ in constant currency, while the technology solutions segment grew 8.6% sequentially.
Operating margins were under pressure, with EBIT margins declining by 210 bps to 13.6%, below street estimates due to weaker operating leverage. Net profit for the quarter stood at ₹170 crore, aided by higher other income.
Q1FY26: Key Highlights
| Metric | Q1FY26 | QoQ Change | YoY Change |
| Revenue (₹ Cr) | 1,244 | -3.20% | -1.90% |
| USD Revenue ($ Mn) | 145.3 | -2% | -4.50% |
| Services Revenue (% of mix) | 77% | -7.6% CC | – |
| EBIT Margin | 13.60% | -210 bps | -230 bps |
| Net Profit (₹ Cr) | 170 | -9.80% | 5.10% |
Management Confident on H2 Recovery
Management highlighted improved deal momentum towards the end of June, securing six large deals in Q1, including four above $10 million, which adds visibility for the coming quarters.
“Strong deal closures and improving client sentiment give us confidence for a recovery from Q2 onwards,” management noted on the earnings call. The aerospace segment maintained growth, while recovery in auto and heavy machinery segments is expected as macro headwinds ease.
PL Capital View
We remain cautious on Tata Technologies due to current valuations and near-term growth challenges. While early signs of recovery are visible, execution will be critical in the coming quarters, especially in the services business.
Tata Technologies is currently trading at 35 times FY27 estimated earnings. We value the stock at 28 times FY27 earnings, arriving at a target price of ₹570 while maintaining our Sell rating.
We project a compounded annual growth rate of 5.1% for revenue and 10.2% for earnings in dollar terms over FY25–FY27. Given the near-term volatility and the elevated ask rate required for growth, we advise investors to monitor margin trends and the pace of deal ramp-ups before considering fresh positions.
Should You Buy or Sell Tata Technologies Stock Now?
We remain cautious on Tata Technologies given its current valuations and do not see meaningful upside at this level. We project a compounded annual growth rate of 5.1% for revenue and 10.2% for earnings in dollar terms over FY25–FY27. With the stock trading at 35 times FY27 estimated earnings, we value it at 28 times FY27 earnings, leading to a target price of ₹570 while maintaining our Sell rating.- notes the Analyst at PL Capital
To read the detailed PL Capital report on Tata Technologies and explore actionable stock picks, click here.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
