Tata Capital: Well in control of asset quality High-margin products to support 10bp of NIMs expansion in FY27E, according to management; maintain Buy

Research evidence excerpt

Tata Capital: Well in control of asset quality High-margin products to support 10bp of NIMs expansion in FY27E, according to management; maintain Buy

Nomura | Tata Capital 29 July 2026

Company profile

Tata Capital was established in Nov 2007 as the flagship financial services arm of the Tata Group, operating as a non-banking financial company

(NBFC) promoted by Tata Sons Private Limited. The company offers a diversified suite of financial products including Consumer Loans, Housing

Finance, Business Finance, Vehicle finance, and Micro Finance. Serving millions of customers across India through an extensive branch network

and robust digital platforms, Tata Capital focuses on retail finance, SME finance, and corporate finance segments. The company maintains strong

credit ratings, healthy asset quality metrics, and continues to demonstrate consistent growth while leveraging strategic partnerships and digital

innovation to expand its market presence across multiple states and customer segments.

Valuation Methodology

We use a residual income methodology to arrive at our TP of INR415, implied PB as of Jun-28 is 2.7x PB. We have used a discounted residual

income method over other valuations methods such as Gordon Growth Model. We prefer residual income as it juxtaposes profits with the cost of

capital required to deliver those profits. The benchmark index is Nifty 50

Risks that may impede the achievement of the target price

Downside risks i) heightened competition in the new product segments where Tata Capital is trying to expand into 2) promoter group driven changes

at Tata Capital if any

ESG

Tata Capital’s sustainability framework focuses on Climate Action, Healthcare, Education and Skill Development, aligned with Tata Group values.