Tata Motors’ first-quarter results have triggered mixed reactions from leading brokerages, with consensus pointing towards persistent headwinds across its business segments, particularly in Jaguar Land Rover (JLR) operations. The company reported a sharp 30% year-on-year drop in profit after tax (PAT) to ₹3,924 crore, impacted by weak volumes and challenges in its international luxury vehicle arm.
Motilal Oswal Financial Services (MOSL) has maintained a Neutral stance on Tata Motors, while cutting the target price to ₹631 from ₹668. MOSL noted that while the India commercial vehicle (CV) business performed well, both JLR and the India passenger vehicle (PV) segments are facing severe headwinds.
The brokerage highlighted a weak demand outlook across all business lines, with JLR in particular hit by tariff uncertainty for US exports, sluggish demand in Europe and China, and rising variable marketing expenses, warranty provisions, and emission-related costs. MOSL expects margin pressure at JLR to persist and has factored in a 150 basis points decline over FY25–27E.
CLSA has taken a more optimistic stance, maintaining an Outperform rating with a target price of ₹805. The brokerage pointed out that JLR’s EBIT margin came in at 4%, slightly above expectations but still down 485 basis points quarter-on-quarter due to negative operating leverage, the US tariff impact, and adverse currency movements.
The CV business delivered an EBITDA margin of 12.2%, up 60 basis points year-on-year, while the India PV segment posted an EBITDA margin of 4%, down 180 basis points year-on-year. JLR has retained its FY26 EBIT margin guidance of 5–7% and aims to remain free cash flow neutral.
Jefferies, however, has reiterated its Underperform rating and slashed the target price to ₹550 from ₹600, citing a big miss in Q1 results amid rising challenges for JLR. The brokerage noted that Q1 EBITDA and pre-exceptional PBT fell 37–41% year-on-year, coming in 13–22% below its estimates.
Jefferies remains unconvinced about Tata Motors’ acquisition of Iveco, seeing multiple headwinds across businesses, and has cut its FY26–28 earnings per share estimates by 8–15% on expectations of lower volumes and weaker margins for both JLR and the India PV segment. It also flagged weak demand in the India truck market and slipping PV market share.
Macquarie has maintained an Outperform rating with a target price of ₹753, describing Q1 as muted in a challenging macroeconomic climate. The brokerage acknowledged strong CV margins but expressed disappointment over the PV performance. While it sees potential margin upside for JLR as certain tariff-related deals come into effect,
Macquarie believes near-term upside is limited due to JLR demand uncertainty in the current macro environment. It expressed a preference for other Indian auto players like Mahindra & Mahindra (M&M) and TVS Motor Company.
Overall, the sentiment around Tata Motors remains cautious, with brokerages split on the stock’s near-term prospects. While some see potential recovery if global demand for JLR picks up and tariff headwinds ease, others remain wary of ongoing margin pressures and subdued domestic PV demand. The CV segment remains the company’s strongest performer, but whether it can offset the broader challenges in the business remains to be seen.
Disclaimer:This article is for informational purposes only and does not constitute investment advice. The views and ratings mentioned are based on reports from various brokerage firms and are subject to change without notice. Readers are advised to conduct their own research or consult a qualified financial advisor before making any investment decisions. The author and publisher are not responsible for any losses arising from the use of this information.
