Tata Motors has recently engaged with top brokerage firms, providing insights into its business trajectory, particularly focusing on Jaguar Land Rover (JLR). Following this interaction, multiple brokerages have released their assessments, offering diverse perspectives on the company’s outlook.
Macquarie: Outperform | Target Price: ₹826
Macquarie maintains an Outperform rating on Tata Motors with a target price of ₹826. The brokerage highlights:
JLR’s Financial Strength: The company is on track to achieve a net cash balance sheet by FY25, improving from a net debt of $1.4 billion as of December 2024.
Strong Demand Trends: JLR continues to grow in the US, witness demand recovery in the UK and Europe, and is outperforming the industry in China.
CLSA: High Conviction Outperform | Target Price: ₹930
CLSA remains bullish on Tata Motors, setting a higher target price of ₹930. Key takeaways:
The management is confident in achieving Q4 FY25 targets for JLR, aligning with its previous guidance from Q3.
JLR’s Capex and Debt Position: While capital expenditure is expected to peak in FY26, JLR is anticipated to turn net debt positive much earlier than expected.
JLR is currently trading at 1x FY27 estimated EV/EBITDA, suggesting attractive valuations.
Nuvama: Reduce | Target Price: ₹720
Nuvama has taken a more conservative stance, giving a Reduce rating with a lower target price of ₹720. The firm cites:
FY25 Profitability on Track: JLR is on course to achieve its EBIT margin guidance of at least 8.5% and turn net cash positive.
Challenges in FY26: JLR’s volume performance in FY26 could face pressure due to the discontinuation of Jaguar models and a subdued outlook in China.
Nomura: Buy | Target Price: ₹861
Nomura remains optimistic with a Buy rating and a target price of ₹861. Key observations include:
Luxury Market Confidence: The management remains confident in JLR’s premium segment strategy and its FY25 EBIT margin target.
Regional Demand Trends: The US market continues to be strong, while demand in Europe appears less challenging than before.
Operational Improvements: Warranty costs are expected to decline from FY25, positively impacting profitability.
The brokerages are mostly positive on Tata Motors, particularly on JLR’s net cash turnaround and operational improvements. However, concerns around FY26 volume growth, China’s demand, and Jaguar model discontinuation remain areas of caution. While Macquarie, CLSA, and Nomura maintain an optimistic stance, Nuvama remains cautious.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Readers are advised to conduct their own research or consult a financial advisor before making any investment decisions.