Tata Capital share price: JM Financial raises target to Rs 370 post Q2 results; here’s why

Brokerage JM Financial has reiterated its ‘Add’ rating on Tata Capital (TCL) following the company’s second-quarter results for FY26. The brokerage has also raised its target price to Rs 370 from Rs 360 earlier, implying a 13 per cent upside from the current price of Rs 327.30. The positive view stems from a "broadly in-line" quarterly performance and what JM Financial described as an "ambitious roadmap" outlined by the company’s management.

The key driver of optimism was the management guidance shared during Tata Capital’s first-ever quarterly call. The company is targeting 18–20 per cent AUM growth for FY26, with a Return on Assets (RoA) of 2.0–2.1 per cent and a Return on Equity (RoE) of 13–14 per cent. Over the longer term, the management has outlined a three-year AUM CAGR target of ~23–25 per cent and aims to lift RoE to 17–18 per cent. JM Financial termed this long-term outlook "ambitious but impressive".

For the quarter ended September 2025, Tata Capital’s consolidated PAT rose 7 per cent quarter-on-quarter, while RoA and RoE stood at approximately 1.8 per cent and 12 per cent, respectively. Though Net Interest Income (NII) came in marginally below JM Financial’s estimates, this was offset by lower opex and credit cost. The company’s consolidated AUM touched Rs 2.44 trillion, driven by a healthy ~6 per cent QoQ growth in the SME finance segment.

Asset quality also remained robust, supported by lower slippages and write-offs. Credit costs moderated by 30 basis points sequentially, while the housing finance arm TCHFL maintained strong momentum, recording a 30 per cent year-on-year rise in AUM.

JM Financial said that Tata Capital delivered a stable quarter with growth, credit cost, and profitability largely tracking expectations. The brokerage has made minor tweaks to its EPS estimates and derived the new Rs 370 target price by valuing the Tata Group NBFC at 3.0x FY27E BVPS.