JM Financial has initiated coverage on Tata Capital Ltd with an ‘Add’ rating and a target price of Rs 360, valuing the company at 2.9x FY27E price to book value (P/BV). Established in 2007, Tata Capital is a leading diversified non-banking financial company (NBFC) backed by the Tata Group, with around 80 per cent of its loan book in secured segments. Retail finance forms the bulk of its lending at 61 per cent of total loans. Advertisement

Tata Capital delivered a strong AUM CAGR of 31 per cent during FY22-24, with average RoA/RoE of 2.3 per cent/18 per cent in FY23/24. However, the merger with Tata Motors Finance (TMFL) impacted FY25 performance, moderating AUM YoY growth to 17 per cent and RoA/RoE to 1.6 per cent/13 per cent. JM Financial expects improvement ahead, projecting AUM/PAT CA

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