Tata Tech lists between Rs 800-850- Dipan Mehta offers his perspective on whether one should consider buying it or not?
Summary:
With the stabilization of US markets, debt markets, and the apparent control of inflation, there is a positive outlook for technology companies such as Tata Technologies, Tata Elxsi, and TCS. Notable outliers like Trent and Titan have performed exceptionally well, while other companies within the same group have faced challenges but continue to endure.
Dipan Mehta, Director at Elixir Equities, suggests that now is an opportune moment for investors to consider adding banking stocks to their portfolios, particularly if there is an under-allocation to this sector.
He emphasizes the significance of the ongoing credit growth, noting that in India, banks and NBFCs still maintain a healthy net interest margin. While there might be some pressure, Mehta is optimistic that a collapse is not imminent.
Reflecting on the Tata Group of Companies, Mehta acknowledges the substantial PE expansion they have witnessed.
Looking ahead, he sees no reason to doubt their continued journey of value creation. Mehta emphasizes that Tata Group companies, known for their strong reputation and investor loyalty, typically command a premium in the market compared to peers in the same industry.
Their longstanding strengths, acquired over time, are expected to sustain their success in the future.
Given the recent stabilization in the US markets and the concurrent stability in their debt markets, along with indications of inflation coming under control, there is an optimistic outlook for technology companies like Tata Technologies, Tata Elxsi, and TCS. Notably, outliers such as Trent and Titan have performed exceptionally well.
While some other companies within the same group may have faced challenges, they are still thriving quite effectively.
But would you say the same for Tata Tech as well?
Certainly. It’s a straightforward decision. Applying for the Tata Tech IPO is a wise move, and you might even contemplate purchasing it upon listing. The stock is likely to consistently trade at a premium multiple. What stands out for me with this company is its performance over the last three to four quarters. While many software companies were facing challenges, Tata Tech consistently delivered commendable financial results. The company boasts a phenomenal track record.
Importantly, among the spectrum of software companies, those involved in the automobile sector experienced the least reduction in tech spending.
So, companies like Tata Elxsi, KPIT, Cummins, and Tata Technologies, given the ongoing disruptions, can anticipate a robust order flow in the future.