Target: ₹1,290
CMP: ₹1,069.10
We attended Tata Technologies’ analyst meet. The demonstration indicated Tata Tech’s prowess in: ICE to EV conversion, SDV, smart manufacturing, plant engineering, robotics, AI implementation and 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).
Tata Tech is in exclusive partnership with Agratas for development and industrialization of battery solutions, which gives it strong foothold in EV domain. It recently started engineering battery solutions for 2-3 wheelers.
Battery solution capabilities may serve as key competitive advantage (in cost engineering segment) for Tata Tech for electrification as battery accounts for about 50 per cent of electric vehicle cost today.
We recommend Buy with unchanged TP of ₹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.
