Tata Technologies (TATE.NS): In a different orbit; upgrade to N

We upgrade Tata Technologies (TATE.NS, TATATECH IN) to Neutral (N) from Underweight (UW) with a new Sep-27 price target of Rs660 (from Rs540). 2QFY27 services revenues grew 4.3% CC QQ, ahead of JPMe at 4%, and ex-Es Tech growth was even stronger at 7%. It announced a net new large deal of $128mn TCV over 2.5 years with an EU luxury OEM that will start ramping up from 3Q onwards and can add ~7% to FY28 growth. Ebitda margins were flat at 16.1% despite 100bps of wage hike headwinds. The EU OEM as well as the Japanese OEM deal (won earlier) provide visibility on growth over the next 18 months, and we now expect Tata Tech to grow the fastest in our coverage at organic CC revenue CAGR of 16% over FY26-28E. Management guided for continued margin expansion as operating leverage benefits play out. We upgrade revenues/EPS by 6-9% over FY28-29E and increase our target PE multiple to 27x (from 24x). The stock has already outperformed the Nifty IT index by 35% YTD and at 30x 2Y fwd PE is trading a