Tata Capital Limited Fair Value
TATACAP · Financial Services · Current price ₹323.2
Is Tata Capital Limited undervalued?
We estimate the fair value of Tata Capital Limited at ₹241 per share, against a market price of ₹363. That puts the share price about -33.6% above our estimate, at medium confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Fair multiple (P/E) (₹280), Residual income (excess return on book) (₹204). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Tata Capital Limited spans ₹204 to ₹280. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
How we got this fair value
Every number below is part of the same estimate for Tata Capital Limited. Nothing here is a target price or a forecast of where the share price will go.
Workable, with real gaps. Weigh it alongside your own view rather than on its own.
Estimate range ₹204 – ₹280
Why this method for this business
Relative P/E and residual income models are most appropriate for a financial services company like Tata Capital, which is asset-light and has a strong balance sheet. These models capture the value of earnings power and book value appreciation, which are key drivers for NBFCs.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
Book value plus the present value of returns earned above the 10.6% cost of equity
- dcf: DCF is less suitable for NBFCs due to the high leverage and volatile cash flows, which make discounting future cash flows unreliable.
What was missing
- Lack of forward EPS estimates
- Limited analyst coverage
- Insufficient historical P/E data for precise normalization
What drives it
19 inputs, grouped by how strong each claim is
- ROE (normalized)
- 16.3%
- Book value / share
- 108 ₹
- Sector-median P/E
- 22.39×
- Peers used
- 5
- EPS (TTM)
- 12.87 ₹/share
computed
reported
peer-median
peer-median
computed
- Cost of equity
- 10.6%
building-block
- Moat
- Narrow
- Excess-return horizon
- 10 yrs
- Term: quality
- -4.3%
- Term: growth
- +21.4%
- Term: capital_allocation
- -6.0%
- Term: financial_strength
- -12.0%
- Term: history
- +0.0%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
computed
computed
quality 46/100 (weak/erratic returns) → discount
durable ~29% CAGR (ROCE 9% < 12% hurdle (growth not value-accretive)) → premium
capital allocation: falling ROCE / weak cash generation → discount
financial strength: high leverage (D/E 5.6) → discount
history: no reliable own-history P/E → not used
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Premium vs sector
- -2.8%
- Fair-multiple confidence
- 38%
- Fair P/E
- 21.76×
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Tata Capital Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Tata Capital Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.