Tata Technologies (TATATECH IN) – Q1FY27 Result Update – Outperforming peers, but valuations capped – SELL
Published on 18 Jul 2026
TATATECH reported a strong Q1 performance, with rev. growth of 4.3% QoQ CC, significantly ahead of our estimate, led by healthy growth across both Services and Tech Solutions. Services revenue grew 4.3% QoQ CC, while reported EBIT margin at 13.3% (+20bps QoQ) was largely in line with our estimate, as strong Services gross margin expansion (+120bps QoQ) was partly offset by upfront investments towards ramp up of large deals & weak Tech solutions margin. However, the growth was broad-based, with non-anchor auto accounts (+6.7% QoQ), Europe (+10.1% QoQ) and Aerospace (+6.4% QoQ), growing above consolidated growth. We increase our target P/E multiple to 26x (earlier 23x) to arrive at a revised TP of INR 610 (earlier INR 510). With this growth visibility and sustaining profitability, TATATECH should outperform its peers in FY27, but all positives are already factored into the current price. Maintain SELL.
