Tata Capital gearing up for a big rally? Analysts bullish as brokerage firm assigns Rs 344 target

Stock to Buy: Tata Capital has received a fresh vote of confidence from HDFC Securities, with the brokerage initiating coverage on the Tata Group financial services company with an ‘Add’ rating and a target price of Rs 344 per share. The report says the company is entering a period of stable operating performance backed by a cleaner corporate structure, stronger balance sheet and clearer long-term guidance from the management.

Tata Group backing, AAA rating anchor its strength

According to HDFC Securities, Tata Capital’s biggest advantages remain its Tata Group parentage, AAA credit rating and a diversified borrowing profile - factors that allow the NBFC to raise funds at some of the most competitive rates in the sector. The brokerage notes that these fundamentals place Tata Capital among India’s most reliable large NBFCs, both in terms of capital strength and access to liquidity.

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As of September 2025, Tata Capital’s AUM stood at Rs 2.4 lakh crore, spread across retail secured loans, unsecured credit, SME lending and corporate financing. Its conservative underwriting has helped the company maintain strong asset quality across cycles, with the exception of a few pockets in the motor finance portfolio.

Merger clean-up done, focus now on scale and efficiency

The firm has completed the merger of TMFL and earlier amalgamations of TCFSL and TCCL - a consolidation exercise that HDFC Securities believes will help Tata Capital improve operating efficiency and sharpen its product mix. The management has set an ambitious roadmap for FY28, targeting:

• A Rs 7 lakh crore balance sheet
• A return on assets (RoA) of 2.5–2.7 per cent
• Leaner operating costs and normalised credit costs
• Faster expansion through digital distribution and partnerships

The brokerage notes that Tata Capital is now among the corporate-backed NBFCs that have demonstrated a successful turnaround, with improved profitability and better risk controls.

Q2 performance signals steady momentum

For Q2 FY26, Tata Capital reported a consolidated net profit of Rs 1,097 crore, a modest 2 per cent rise year-on-year. Revenue grew 8 per cent to Rs 7,737 crore.
The quarter also saw strong traction in the core business: excluding the motor finance segment, profit jumped 33 per cent to Rs 1,128 crore, with AUM rising 22 per cent to Rs 2.15 lakh crore.

Tata Capital’s IPO, which opened on 6 October and closed on 8 October 2025, was subscribed 1.95 times. The stock listed at a 1.2 per cent premium at Rs 330 against the issue price of Rs 326. The listing had generated considerable interest as one of the year’s biggest financial sector offerings.

Stock performance

On Friday, November 28, Tata Capital shares closed 0.99 per cent higher at Rs 327.90. The stock has gained over 3 per cent in the past week. Its 52-week range remains between Rs 315 and Rs 336.55.

Disclaimer: The views, suggestions and recommendations expressed in this article are solely those of investment experts. Zee Business advises readers to consult their financial advisers before taking any investment decision.