The shares of Tata Motors are in focus after the company’s British luxury division (JLR) shared its viewpoints for its future performance. In this article, we will discuss more about what different analysts have to say about it.
With a market capitalisation of Rs 2,47,155 crores, the shares of Tata Motors Ltd are currently trading at Rs 671 per share, down by 43.1 percent from its 52-week high of Rs 1,179.05 per share. Over the past five years, the stock has delivered a return of 563 percent.
Jaguar Land Rover (JLR), which contributes to 72 percent of Tata Motors’ revenue, in its management commentary, said that it is anticipating an EBIT margin between 5-7 percent as compared to the previously anticipated 10 percent.
Furthermore, the margins were low from its FY25 margin of 8.5 percent. Additionally, the company expects its free cash flow to decline to nearly zero in FY26, down from a value of Rs 17,493 crore in FY25.
Morgan Stanley has maintained an ‘Equal-weight’ rating with a target price of Rs 715, suggesting an upside potential of 5.30 percent from its current level. It remains bullish with a gradual recovery in later years. However, it cited concerns with its margin cut and free cash flow strains.
Jefferies has reiterated its ‘Underperform’ rating on Tata Motors, slashing the target price to Rs 600 from Rs 630, suggesting a downside potential of 11.63 percent from its current level. It has also slashed FY26–28 EPS estimates by 12–19 percent. It cited similar reasons stated above while mentioning increasing competition and a slowdown in India’s commercial vehicle (CV) demand.
On the other hand, CLSA has assigned the highest target price of Rs 815, suggesting an upside potential of 20 percent from its current level. Despite the recent challenges, CLSA expects profitability to recover from FY27 as Rs 1,63,548 crore in annual cost savings and better scale kick in.
Financial Highlights
The company reported a revenue of Rs 4,39,695 crore in FY25, up by 1.30 percent from its FY24 revenue of Rs 4,34,016 crores. However, it reported a net profit decline of 11.50 percent to Rs 28,149 crore in FY25 from Rs 31,807 crores in FY24.
The stock delivered an ROE and ROCE of 28.08 percent and 19.97 percent, respectively, and is currently trading at a P/E of 8.83x as compared to its industry peers of 31.36x.
Written by Satyajeet Mukherjee
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