Tata Capital is uniquely positioned to delivery system-leading growth and gain market share, backed by its strong liability profile, a comprehensive product mix and an extensive omnichannel distribution network, JPMorgan wrote in its note.
The brokerage added that Tata Capital’s “risk before growth” approach drives its best-in-industry Gross NPA levels and credit costs, and that gives JPMorgan the confidence in the company’s ability to weather the asset quality downcycles without taking a major hit.
Although JPMorgan sees scope for expansion of Tata Capital’s Net Interest Margins (NIMs), lower credit costs and opex, it expects the company’s Return on Assets (RoA) to moderate to 1.9% for financial year 2026, majorly due to the merger of Tata Motors Finance with the company.JPMorgan expects Tata Capital’s net profit to grow at a Compounded Annual Growth Rate (CAGR) of 30% between financial year 2026-2028, with Return on Equity (RoE) to be between 13.5% to 14.5% during the same period.
At 2.6 times financial year 2027 estimated price-to-book, JPMorgan finds Tata Capital’s risk-reward to be favourable.
JPMorgan has become the third brokerage to initiate coverage on Tata Capital, with the previous two having “add” ratings on the stock with similar price targets.
Shares of Tata Capital ended 1.5% lower on Tuesday at ₹320.1. The stock is below its IPO price of ₹326 and has traded in a very narrow band since listing.
