India’s passenger car market is valued at USD 42.72 billion in 2024, projected to reach USD 53.04 billion by 2029. While overall passenger vehicle sales declined by 3.4% in September, utility vehicles grew by 6.7%. SUVs dominate with a 41% market share, with sales expected to reach 1.37 million units.
Price movement
With a market capitalization of Rs 2.40 lakh crore, the shares of Tata Motors Ltd were trading at Rs 653.00 per share, increasing around 2 percent as compared to the previous closing price of Rs 640.95 apiece.
Brokerage target
Morgan Stanley, one of the well-known brokerages globally, gave a ‘buy’ call on the automobile stock with a target price of Rs 853 apiece, indicating a potential upside of 31 percent from Thursday’s price of Rs 653 per share.
Brokerage rational
Morgan Stanley noted that Land Rover’s US sales surged 79 percent YoY to 11,900 units, exceeding January’s 70 percent and December’s 34 percent growth. The US accounted for 23 percent of Jaguar Land Rover’s FY24 sales, contributing 15 percent to Tata Motors’ consolidated revenue, highlighting strong demand momentum.
Morgan Stanley sees the European Commission’s industry action plan, set for March 5, as a key trigger for the stock. The brokerage notes that any relaxation in carbon dioxide regulations would benefit Jaguar Land Rover (JLR), potentially impacting its growth and regulatory compliance positively.
Segment Performance
Tata Motors’ CV segment saw an 8.4 percent YoY revenue decline to Rs 18,400 crore, but margins improved with cost-saving and PLI benefits. Trucks and buses gained market share, while PV sales hit record highs, boosting EV penetration to 24 percent. Strong SUV demand and festive sales drove growth.
New development
Tata Motors launched the all-new Sierra and Harrier EV at the Auto Expo, along with new BEVs and hydrogen ICE trucks. Its Fleet Edge platform now has 760,000+ active vehicles, while E-Dukaan and Fleet Verse grow rapidly. Sustainability efforts include zero-waste certification and decarbonization initiatives.
Management comments
Management remains optimistic about a gradual rise in domestic demand, driven by infrastructure spending and new product launches. Meanwhile, JLR expects improved wholesales in Q4, dependent on retail growth, reflecting positive market trends and potential recovery in the automotive sector.
Company Profile
Tata Motors Group is a top worldwide automaker. As part of the legendary multinational corporation, the Tata Group, provides the globe with a diversified portfolio of automobiles, sports utility vehicles, trucks, buses, and defence vehicles.
Written by Abhishek Singh
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