Tata Motors recently held its analyst meet, offering critical insights into its future roadmap, financial expectations, and strategic targets across its businesses. Following the session, several top brokerages issued their views and target prices, reflecting a cautious yet diverse sentiment.
Nuvama: Retain 'Reduce', Target ₹670
Nuvama maintained its 'Reduce' rating on Tata Motors, setting a target price of ₹670. The brokerage expressed concern over the outlook for Jaguar Land Rover (JLR), citing challenging demand conditions in the US and China. Nuvama anticipates a muted 3% EBITDA CAGR over FY25–27, influenced by weak demand and higher marketing/sales promotion spends.
Motilal Oswal: Neutral, Target ₹690
Motilal Oswal retained a ‘Neutral’ stance with a target price of ₹690. Key observations included:
Execution remains critical amid persistent headwinds in both commercial (CV) and passenger vehicle (PV) segments.
Ambitious FY27 targets: 40% CV share with EBITDA in teens, and 16% PV share with double-digit margins.
Demerger timelines are on track, but the brokerage refrained from updating estimates in the absence of new triggers.
The PV share target of 18–20% in 2–3 years hinges on new launches.
JLR remains under pressure due to US tariffs, weak demand in China and Europe, and rising costs.
FY26 guidance was withheld by management, while 100 basis points margin compression is expected at JLR by FY27.
UBS: Sell, Target ₹720
UBS has issued a ‘Sell’ call with a target price of ₹720, flagging an adverse risk-reward outlook. It expects the much-talked-about business demerger to be completed by October 2025, which may act as a medium-term catalyst, though near-term concerns persist.
Nomura: Neutral, Target ₹799
Nomura maintained a ‘Neutral’ rating, assigning the highest target price among brokerages at ₹799. Highlights from its coverage included:
Tata Motors aims to raise both market share and margins in CV and PV segments.
It expects a 5% CAGR in Medium & Heavy Commercial Vehicle (MHCV) volumes, driven by replacement demand.
The company targets 11.5% to 12% EBITDA margins over the next two years.
Jefferies: Underperform, Target ₹630
Jefferies continued with an ‘Underperform’ rating and set a target price of ₹630. Post analyst meet takeaways included:
A reaffirmed focus on improving franchise value and margins in both PV and CV verticals.
In PVs, the company plans to launch 7 new vehicles, aiming to gain 5-7 percentage points market share.
Tata Motors is also targeting a 10% EBITDA margin in PVs by FY30.
While Tata Motors has set ambitious growth targets, brokerages remain cautious due to persistent demand headwinds, geopolitical risks, and execution challenges. Investor sentiment remains mixed, with some brokerages betting on long-term growth strategies and others highlighting near-term risks in the JLR and domestic markets.
Disclaimer:
This article is for informational purposes only and not investment advice. Please consult a financial advisor before making investment decisions.
