JP Morgan has slashed its target price by 41 percent, as it expects certain headwinds in its business, which are set to hit Tata Motors really hard. In this article, we will discuss the viewpoints of the global brokerage on Tata Motors.
With a market capitalization of Rs 2,59,893 crores, the shares of Tata Motors Ltd are currently trading at Rs 706 per share, down by 40 percent from its 52-week high of Rs 1,179.05 per share. Over the past five years, the stock has delivered an impressive return of 544 percent.
The global brokerage has earlier set a target price of Rs 1,250 per share, which is now changed to Rs 740 per share, which is a reduction of 41 percent. JPMorgan has pointed to new challenges for Tata Motors, including tariff risks, an aging portfolio at Jaguar Land Rover (JLR), and weak industry growth. The company is grappling with market share pressures in both the commercial and passenger vehicle space in India, where it is seeing declining sales, a fundamentally different business environment from many of the large global automakers.
The brokerage expects FY26 to be a challenging year, potentially taking Tata Motors back into a net debt position. However, from FY27 onwards, a gradual recovery is expected, in particular from tariff pass-throughs, JLR’s launches of EVs, and a cyclical recovery in India’s commercial vehicle market.
There will also be improvements in passenger vehicle margins for Tata Motors, as well as stabilisation in domestic market share, which should help repair the balance sheet.
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.
Domestically, the company sold 67,429 units in May 2025, which is a decline of 10 percent from its FY24 number of 75,173 units. Total commercial vehicles stand at 28,147 units in FY25 as compared to 29,691 units a year ago, which is a decline of 5 percent over the year. In the passenger vehicle segment, it recorded a growth of 2 percent to 5,685 units in May 2025, as compared to 5,558 units in May 2024.
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 9.19x as compared to its industry peers of 30x.
Written by Satyajeet Mukherjee
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