Motilal Oswal Advises Selling Tata Technologies at Rs 600 Amid Valuation Concerns Tata Technologies (TTL) reported first-quarter FY27 revenue of USD175 million, reflecting a 4.3% quarter-over-quarter increase in constant currency terms, surpassing the estimated 2% growth. The Services segment contributed USD137 million, up 4.3% QoQ, while the EBIT margin stood at 13.3%, slightly below the projected 14%. Adjusted profit after tax (PAT) rose 11.3% quarter-over-quarter and 6.1% year-over-year to INR1,808 million, though below the estimated INR1,985 million. Year-to-date, TTL’s revenue, EBIT, and adjusted PAT grew 33.8%, 30.7%, and 6.1% respectively in INR terms for FY27. For the second quarter of FY27, the firm anticipates revenue, EBIT, and adjusted PAT growth of 26.5%, 28.6%, and 21.5% YoY. Despite improved execution and broad-based growth across services, non-anchor automotive accounts, and Europe, Motilal Oswal maintains a "Sell" rating, citing valuations that appear premium relative to growth prospects and peer companies. The target price of INR600 is assigned, with the firm emphasizing that current valuations already reflect much of the expected recovery. The analysis highlights that while FY27 has started with a stronger performance, sustained execution of recent large deals will be critical. Management projects double-digit organic growth for FY27, with acceleration expected in the second half as recently secured contracts ramp up. However, the demand environment remains selective, and while TTL’s focus on full-vehicle development and software-led engineering has aided market share gains, the sustainability of this outperformance over multiple quarters remains uncertain. TTL’s growth trajectory has diverged from peers, though challenges persist.#motilal_oswal #fy27 #tata_technologies #tenneco #japanese_oem
