Tata Technolog. (TATATECH)
Slow GrowerFairStock Score: 43/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹867.9 |
| Market Cap | ₹35,241.24 Cr |
| P/E Ratio | 63.3 |
| ROCE | 25.8% |
| ROE | 14.84% |
| Dividend Yield | 0.96% |
| Profit Growth | -10.89% |
| Debt/Equity | 0.24 |
| Sales Growth | 8.66% |
| Free Cash Flow | ₹634 Cr |
| Promoter Holding | 55.21% |
| 52-Week Range | ₹507.4 — ₹891 |
| Sector | IT - Services |
| Book Value | ₹96.64 |
Strengths
- Promoter holding of 55.21% provides stability and alignment with minority investors.
- Conservative balance sheet with debt/equity of 0.07 and strong ROCE of 25.80%.
- Free cash flow of ₹634 Cr gives cash generation despite weak reported profit.
- Piotroski F-Score of 7/9 and Altman Z-Score of 3.86 indicate no near-term financial distress.
Concerns
- Profit growth is -18.12%, and latest quarterly net profit is just ₹7 Cr on sales of ₹1,366 Cr, showing severe margin compression.
- Valuation is rich at P/E of 36.18 and PEG of 18.90 relative to current growth.
- Graham Number of ₹129.42 and DCF value of ₹40.28 are far below price of ₹563.50, leaving no margin of safety.
- Sales growth of 2.64% is a sharp slowdown from the 5-year revenue CAGR of 16.76%.
AI Analysis
Tata Technologies is a decent business at an indecent price. As Graham taught, price is what you pay; value is what you get. Here I get promoter holding of 55.21%, debt-to-equity of just 0.07, ROCE of 25.80%, and free cash flow of ₹634 Cr. That combination suggests a financially solid engineering services company with a usable moat. But the income statement tells a different story. Latest quarter sales were ₹1,366 Cr but net profit was only ₹7 Cr. Profit growth has fallen 18.12%, and sales growth is just 2.64%. The 5-year revenue CAGR of 16.76% shows past promise, but current momentum has stalled. The market still prices it as if growth will return immediately. At ₹563.50, the P/E is 36.18, P/B is 6.39, and PEG is 18.90. Graham's number gives ₹129.42, implying negative margin of safety of 352%. DCF value is even lower at ₹40.28. Even allowing for uncertainty, the current price leaves no room for error. The 1.43% dividend yield does not compensate. Piotroski score of 7/9 and Altman Z of 3.86 tell me the balance sheet isn't the problem; the price is. Buffett's first rule is not to lose money. Buying a shrinking earner at 36 times earnings risks that. I would rather wait for Mr. Market to offer a meaningful margin of safety before putting capital here.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer