Tata Capital enjoys the backing of the Tata brand and low funding costs, with AAA domestic and BBB international ratings, Canara Bank Securities notes, adding that credit costs remain under 1%, net NPAs hover around 0.5%, and provision coverage is high. Daily return on equity and operating metrics outperform year-end figures by roughly 250 bps.

While investments in technology and distribution have pushed up the cost-to-income ratio, operating leverage is expected to improve, the brokerage said, adding that liabilities are well-diversified across banks, NCDs, CPs, NHB, SIDBI, and overseas sources.