JPMorgan has initiated coverage on Tata Capital with an overweight rating and a target price of ₹370, calling it one of the most compelling structural growth stories in India’s financial sector. The brokerage said Tata Capital is uniquely positioned to deliver system-leading growth and capture market share, supported by its strong liability franchise, a comprehensive and well-diversified product portfolio, and a deep omnichannel distribution network that gives it meaningful reach across customer categories.
According to JPMorgan, the company’s “risk before growth” operating philosophy remains one of its key differentiators, resulting in industry-best gross NPA levels and consistently low credit costs. This, the brokerage said, gives it confidence that Tata Capital can navigate asset quality downturns with limited impact compared to peers, particularly at a time when consumer leverage cycles and unsecured lending risks are being monitored closely across the industry.
While JPMorgan expects FY26 return on assets to moderate to around 1.9%—partly due to the ongoing merger of Tata Motors Financial Services—the firm believes this will be temporary. It sees scope for steady improvement in the years ahead, driven by higher net interest margins, lower credit costs and better operating leverage. The brokerage is forecasting a 30% net profit CAGR over FY26–28, with return on equity expected to expand to 13.5–14.7% and RoA to move toward 2.1% as synergies begin to reflect.
JPMorgan added that at 2.6x FY27 estimated price-to-book, Tata Capital’s valuations remain favourable given the scale of the growth opportunity and the company’s strong competitive positioning. The brokerage believes continued balance-sheet strengthening and organic market-share gains could drive a sustained re-rating.
Disclaimer: The views above are those of JPMorgan. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions
