Check Before You Invest : Tata Capital Ltd

BSE: 544574 NSE: TATACAP ISIN: INE976I01016

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does Tata Capital Ltd belong to?

Tata Capital Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is Tata Capital Ltd a good quality company?

Tata Capital Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is Tata Capital Ltd undervalued or overvalued?

Tata Capital Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Tata Capital Ltd a good buy now?

Tata Capital Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Tata Capital Ltd?

Tata Capital Ltd Operating Income growth is 64.68% for FY-2025, which is below its 5-year CAGR of 126.58%, indicating slower growth.

Q.2 Return on Assets of Tata Capital Ltd?

Tata Capital Ltd Return on Asset is 1.7%, which is in line with its 5-year historical median of 1.7%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NPM%	11.85	18.75
PPOP%	63.24	34.94
RoA%	1.7	1.7

Q.3 Return on Equity (ROE) of Tata Capital Ltd?

Tata Capital Ltd Return on Equity is 12% for FY-2025, which is in line with its 5-year historical median of 12%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Tata Capital Ltd?

Tata Capital Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 63.24% for FY-2025, which is above its 5-year median(34.94%), indicating increasing margins.

Q.5 Net Profit Margin of Tata Capital Ltd?

Tata Capital Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 11.85% for FY-2025, which is below its 5-year median( 18.75%), indicating decreasing margins.

Q.6 Total Asset growth of Tata Capital Ltd?

Tata Capital Ltd Total Asset growth is 45.07% for FY-2025, which is below its 5-year CAGR of 77.31%, indicating slower growth.

Q.7 Capital Adequacy ratio of Tata Capital Ltd?

Tata Capital Ltd Capital Adequacy ratio (CAR) is 16.9% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Q.8 Asset Quality of Tata Capital Ltd?

Tata Capital Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 0.00% for FY-2025, which is below its 5-year median 2.4%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.98% which is above its 5-year median( 0.6%), indicating deteriorating asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Tata Capital Ltd?

Promoters hold 85.41% of the Tata Capital Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Tata Capital Ltd vs Industry Peers?

Tata Capital Ltd AUM CAGR is 77.31%, compared to the 5-year industry median CAGR of 23.24%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Tata Capital Ltd vs industry peers

Tata Capital Ltd profit metrics are in line with the industry median level of 17.64%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	11.85	24.08
PPOP%	63.24	25.73
RoA%	1.7	3.1

Q.3 Operating efficiency of Tata Capital Ltd vs industry peers?

Tata Capital Ltd ROCE (9.3) is below the industry median of (10.9); while the current ROE (12) are below than the 5-year average Industry ROE (15.6). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	11.85	24.08
PPOP%	63.24	25.73
RoA%	1.7	3.1
ROCE%	9.7	10.9
ROE%	12	15.6

Valuation & price assessment

Q.1 Stock return of Tata Capital Ltd over the last decade?

Over the last - years, the stock has delivered a CAGR of N/A% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	-

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	44.21	53.45	28.96
Price to Book	3.63	3.71	1.11
Price to Sales	6.27	6.34	9.10
EV to EBITDA	14.96	15.06	11.77

Q.4 Valuation ratios of Tata Capital Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 3.63% is lower than its historical median of 3.71%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Tata Capital Ltd return on invested capital (ROIC) is 6.94% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value erosion.

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