IDBI Capital - Tata Technologies IPO Note

Tata Technologies Limited range of services includes IT Consultancy, SAP implementation, CAD/CAM engineering & design consultancy. It generates ~80% from services, 11% from products, and 9% from Education as of FY23. Vertical the company generates the majority of revenues from automotive (which is seeing healthy traction led by disruption). Apart from automotive, it will be a key beneficiary of tailwinds in aerospace led by capacity expansion plans of aircraft manufacturers and MRO activities. Its revenue and PAT has grown at a CAGR of 36% & 62% over FY21-FY23. H1FY24 has seen 34% & 36% YoY revenue & PAT growth and we expect robust earnings growth going forward. It is valued at ~33x FY23 EPS vs peer average of ~63x FY23 EPS. Hence, we recommend SUBSCRIBE.