Motilal Oswal
Target: ₹390
CMP: ₹370.10
is among India’s leading diversified NBFCs, with an AUM of INR2.77t as of Mar’26. The company has delivered a robust about 29 per cent AUM CAGR (excluding Motor Finance) over FY23-26, reflecting the strength of its franchise, diversified business model, and consistent execution.
TCL’s loan portfolio is highly granular, with about 98 per cent of accounts carrying ticket sizes below INR10m. Asset quality is supported by a predominantly secured lending book (80 per cent secured), while the portfolio is also well diversified, with no single product contributing more than 20 per cent of total loans.
We believe TCL is well-positioned to sustain a healthy AUM CAGR of around 23 per cent over FY26-28E, along with a calibrated shift toward higher-yielding segments and continued investments in digital capabilities.
TCL benefits from a strong liability franchise, supported by Tata Group parentage and a AAA credit rating. This enables access to funding at competitive costs.
While we expect the company to deliver healthy AUM growth and gradual improvement in profitability over the medium term, we believe current valuations adequately reflect these positives.
We initiate coverage on TCL with a Neutral rating and a TP of ₹390, based on 2.7x Mar’28E P/BV. A meaningful re-rating would likely require sustained improvement in RoA and RoE and continued expansion in higher-yielding retail lending segments.