Tata Technologies: Growth margin trade-off; weak EU Auto environment and rich valuations keep us UW

研报英文原文证据摘录

Tata Technologies: Growth margin trade-off; weak EU Auto environment and rich valuations keep us UW

J P M O R G A N Asia Pacific Equity Research

20 July 2026

Tata Technologies Underweight

TATE.NS, TATATECH IN

Growth margin trade-off; weak EU Auto environment Price (17 Jul 26):Rs758.05

and rich valuations keep us UW Price Target (Jun-27):Rs540.00

1QFY27 print beat on revenues but missed on margins. Overall revs, Services revs IT Services, EMS, Telecom, and

as well as Auto all grew 4.3% CC QQ led by deal ramp-ups. Management reiterated Internet Research

its guidance of double-digit organic CC revenue growth in FY27 on the back of Bhavik Mehta, CFA AC

deal ramp-ups and strong pipeline. However, it did highlight headwinds in the (91-22) 6157-3871

German market as certain clients undergo restructuring and cost optimization. We bhavik.mehta@jpmchase.com

remain wary of the challenges the EU Auto industry is facing as highlighted by J.P.Tower,MorganSantacruz(E),India PrivateMumbaiLimited,- 400098,J.P. MorganSEBI

peers KPITTECH, TELX and LTTS. Management discontinued its earlier Registration: INH000001873, (91-22) 6157-3000.

guidance of Ebitda margins reaching 18% by 4QFY27 and said margin expansion Technology, IT Services, Telecoms &

will be moderate going ahead, which we believe is mainly driven by focus on rev Internet

growth thereby driving a growth margin trade-off. We increase revenues by 2-3% Ankur Rudra, CFA

due to the beat but cut margins by 10-70bps over FY27-29E driving minor changes (65) 6801-3237

to earnings. Remain UW as the stock has already rallied 28% since early May vs ankur.rudra@jpmorgan.com

J.P. Morgan Securities Singapore Private Limited

Nifty flat and valuations look rich at 38x/33x FY27/28E PE.

• 1Q print – revenue beat, margins miss.