Market
Jun 19, 2026 Major2
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Emkay Global Reiterates 'Add' Rating on Tata Capital, Maintains ₹390 Target Amid Strong Growth Guidance
Emkay Global has maintained its 'Add' rating on Tata Capital with a target price of ₹390, following a management interaction that reinforced confidence in the NBFC's growth and profitability outlook. The company targets an AUM CAGR of 23-25% by FY28 and a RoA of 2.5-2.7%, driven by a strategic shift toward higher-yielding loans and operational efficiency gains.
Quick Facts
Who
Emkay Global
What
reiterated 'Add' rating
When
2026-06-19
Where
India
- reiterated 'Add' rating
- set target price of ₹390 per share
- targeted AUM CAGR of 23-25% by FY28
- targeted RoA of 2.5-2.7% by FY28
- focused on higher-yielding lending segments
Emkay Global has reaffirmed its positive stance on Tata Capital, maintaining an 'Add' rating and a target price of ₹390 per share. The brokerage's outlook follows a recent interaction with the company's senior leadership, including its managing director, which reinforced confidence in the non-banking financial company's (NBFC) growth trajectory and profitability goals despite a mixed macroeconomic environment.
The company's long-term strategy centers on a targeted Assets Under Management (AUM) compound annual growth rate (CAGR) of 23-25% by fiscal year 2028. To achieve this, Tata Capital is sharpening its focus on higher-yielding lending segments such as affordable housing, gold loans, micro loans against property, and unsecured personal and business loans. The management also aims to expand into deeper geographies and increase its branch presence, which are expected to support sustained asset growth.
On profitability, Tata Capital's management has guided for a Return on Assets (RoA) of 2.5-2.7% by FY28, supported by a decline in credit costs to around 1% and improvements in operational efficiency. The company is leveraging digital tools and artificial intelligence to streamline operations, reducing operating expenses relative to assets. Additionally, net interest margins are expected to benefit from a higher mix of high-yield products and more granular risk-based pricing.
Asset quality trends appear stable, with management noting a moderation in bounce rates as of June, indicating healthy repayment behavior. The motor finance portfolio, which faced challenges previously, is expected to become a growth contributor starting in the second quarter of FY27. However, the company remains cautious in certain pockets of the MSME and commercial vehicle financing segments. On the funding side, though the incremental cost of funds has risen, management expects this pressure to stabilize or ease.
Emkay's target price of ₹390 is based on a price-to-book multiple of approximately 2.6 times the estimated value for FY28. The brokerage highlighted that Tata Capital's diversified business model, execution capabilities, and improving return metrics underpin its positive rating. Key factors to monitor going forward include the execution of the FY28 guidance, credit cost trends, interest rate movements, and the ramp-up of the high-yield product portfolio.
Why This Matters
For investors tracking Indian NBFCs, this reaffirmation signals confidence in Tata Capital's ability to deliver sustainable growth despite macroeconomic headwinds. The specific targets—23-25% AUM CAGR and 2.5-2.7% RoA by FY28—provide clear benchmarks to monitor execution. The shift towards higher-yielding segments like affordable housing and gold loans could improve profitability if managed well, but also carries higher credit risk; investors should watch credit cost trends closely. Emkay's 2.6x price-to-book valuation on FY28 estimates suggests potential upside if guidance is met, but interest rate movements and credit quality in MSME/commercial vehicle portfolios remain key risks.
Timeline & Sources
Jun 19, 2026
WireEmkay Global reaffirms 'Add' rating on Tata Capital with ₹390 target price following management interaction