With over Rs. 2,04,237 Lakh crore wealth wiped out in Tata Motors’s 47 percent fall from its 52-week high of Rs 1,179. The market capitalization of Tata Motors has dropped from Rs 4,34,548 Crores to Rs 2,32,098 Crores in just 7 months, because of several reasons like weak JLR demand and Tariff concerns.
Why Tata Motors Saw a Massive Correction
Tata Motors faces a significant challenge due to declining demand for its luxury Jaguar Land Rover (JLR) segment, particularly in key markets such as China and Europe. Additionally, a drop in commercial vehicle sales has added to the company’s concerns.
With Tesla’s entry into the Indian market, investors are speculating about its potential impact on Tata Motors’ EV segment. However, given that Tesla’s vehicles are expected to be priced significantly higher than affordable EV offerings, their presence is unlikely to pose a major threat to Tata Motors’ electric vehicle sales.
CLSA On Tata Motors
CLSA has set a target price of Rs. 930 for Tata Motors, indicating a 47 percent upside from its current level of Rs. 630. The brokerage believes that Tata Motors’ Jaguar Land Rover (JLR) segment is currently undervalued, trading at 1.2x FY27CL EV/EBITDA, below its normative multiple of 2.5x, with a per-share value of approximately Rs. 320 compared to its target valuation of Rs. 450 per share.
Additionally, CLSA anticipates a revival in the Medium & Heavy Commercial Vehicles (M&HCV) segment, from FY27 onwards as demand in this sector follows a cyclical pattern, which could further support Tata Motors’ growth.
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Financial Highlights
The company reported a 2.71 percent YoY increase in revenue from Rs. 110,577 Crore in Q3FY24 to Rs. 113,575 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 11.95 percent in revenue from Rs. 101,450 Crore in the previous quarter.
Their Net profit saw a decrease of 21.93 percent YoY from Rs. 7,145 Crore to Rs. 5,578 Crore for the same period. On a QoQ basis, the company reported a decrease of 61.6 percent in Net profit from Rs 3,450 Crore in the previous quarter.
About the Company
Tata Motors Limited, a subsidiary of the Tata Group, is one of India’s largest automotive manufacturers with a diverse portfolio spanning passenger vehicles, commercial vehicles, and electric vehicles (EVs). Headquartered in Mumbai and founded in 1945, the company has a strong presence both in India and globally, with operations in the UK, South Korea, South Africa, and Latin America. It dominates India’s commercial vehicle market and has a growing share in the passenger vehicle segment.
Written By Abhishek Das
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