Sell Tata Technologies; target of Rs 510: ICICI Securities

ICICI Securities research report on Tata Technologies

Tata Technologies’ (TATATECH) revenue declined 7.6% QoQ CC in its core services segment. Growth was impacted as OEMs delayed ramp-ups and paused R&D spends amid tariff-led challenges. Management is optimistic of a recovery from Q2 on the back of a healthy order book (OB) at end-Q1. Even with the envisaged recovery from next quarter, FY26 growth would likely be weak growth year, in our view. In contrast to management’s double-digit revenue growth aspiration, we model a 1.5% YoY USD dip in FY26. TATATECH aims to maintain its FY26 EBIT margin akin to FY25; a tall order, in our view, given the feeble revenue growth.

Outlook

We continue to value TATATECH at 25x on Q3FY27E to Q2FY28E EPS of INR 20 to arrive at a TP of INR 510. We maintain SELL given rich valuations and the slow recovery from challenges in the automotive segment.

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Tata Technologies - 15072025 - icici