60% Up From 2024 Lows: Tata's NBFC Stock Outruns Its Own Two Largest Stocks; BUY For Rs 7580 TARGET

Tata Group index on NSE has plunged by over 8% in a month, driven by a downfall in majority of Tata stocks. But there is one NBFC stock of the group which is not part of the Nifty Tata Group index but has outperformed the conglomerate's two largest giants aka Tata Consultancy Services (TCS) and Tata Motors. There is room for more buying in this NBFC as it is among the top picks for SAMVAT 2081.

Who is it? It is none other than Tata Group-backed NBFC, Tata Investment Corporation Limited.

Tata Investment Share Price:

When both Sensex and Nifty dropped by nearly 1% on November 18, Tata's NBFC defied the bearish trend and ended at Rs 6,662.10 apiece, up by Rs 50.90 or 0.8% on NSE, with a market cap of Rs 33,707.09 crore. The stock touched the day's high of Rs 6,854.35 apiece.

The historical data on NSE showed that in 2024, year-to-date, the lowest level touched by Tata Investment was on January 2, 2024, of Rs 4,168.40 apiece, while its highest level was Rs 9,756.85 recorded on March 7, 2024.

From its YTD lows, Tata Investment stock has zoomed by nearly 60% at the current market price. Also, from January 1 to November 18, 2024, the stock advanced by a whopping 56.44%, which is far better than the performance of Tata Motors and TCS.

Under Tata Group, TCS is the largest company in terms of market share, followed by Tata Motors. As of November 18, TCS has a market capitalisation of Rs 14,53,440.03 crore, while the m-cap of Tata Motors is at Rs 2,84,356.61 crore.

But, YTD, TCS stock has only given 5.5% returns, while Tata Motors erased its early 2024 gains and is now in the red with a downside by 2.33%.

Brokerage Way2Wealth added Tata Investment to its top picks for SAMVAT 2081.

BUY Tata Investment Stock:

The main source of income for the company is dividend income, interest income and net gain on fair value changes. Revenue from operations grew at 38% YoY to Rs 3,831mn while Profit after tax was up 53% YoY to Rs 3,849mn, as per Way2Wealth.

Further, the brokerage highlighted that TATATINVEST holds a notable stake in Tata Group's companies like Tata Chemicals Ltd. (5.97%), Tata Consumer Products Ltd. (4.65%), Trent Ltd. (4.28%), Voltas Ltd. (3.01%), Titan Co. Ltd. (2.01%), Tata Elxsi Ltd. (1.69%), The Indian Hotels Co. Ltd. (1.26%), Tata Steel Ltd. (0.34%), Tata Motors Ltd. (0.3%), Tata Power Co. Ltd. (0.21%), Tata Consultancy Services Ltd. (0.03%). It also has a stake in some of Tata Group's unlisted entities such as Tata Autocomp Systems Ltd., Tata Capital Ltd., Tata Industries Ltd., Tata Services Ltd., Tata Sons Pvt. Ltd., etc.

Also, Tata Sons Ltd. was declared by RBI as an upper-layer NBFC which makes it mandatory to get listed in primary markets by September 2025. While the group had requested the central banker to exempt it from the mandatory listing, recent reports suggests RBI to likely have turned down the plea, the brokerage took note.

Additionally, the company holds stakes in several other Non-Tata Group companies such as PFC Ltd. REC Ltd., Sun Pharma. Ind. Ltd., Infosys Ltd., GAIL Ltd., Reliance Industries Ltd., etc. It also holds stake in unlisted companies such as National Stock Exchange of India Ltd.

Way2Wealth said, while there exist few other options such as repayment of borrowing or transferring the holding to Tata Capital or any other entity to get deregistered as core investment company. And upper-layer NBFC, any developments on the group's decision related to the listing process can act as a trigger for the stock price.

On the valuation, the brokerage said, "While any positive development on the listing of Tata Sons Ltd. can be a good trigger for the company, fair value change in portfolio of listed as well as unlisted companies will drive its earnings performance, thus we include TATAINVEST."

The target price on Tata Investment is set at Rs 7,580 for SAMVAT.

Tata Investment funds a diversified portfolio of quoted and unquoted securities of companies, including Tata Companies, which are engaged in various businesses with a history of strong operating and financial performance.