Tata Motors Ltd. share price target

Tata Motors JLR reported Q1FY26 wholesale volumes of 87,286 units, a 10.7% decrease YoY and 21.7% down from Q4FY25, reflecting the planned wind down of legacy Jaguar models and US import tariffs.

We attended JLR’s Annual Investor Day meet to understand its outlook and growth strategy. JLR gave guidance for £28bn revenue with 5-7% EBIT margin in FY26 (vs earlier guidance of 10%; FY25: 8.5%); it maintained its interim/long-term guidance of 10%/15%, led by sustained focus on premiumization (growing share of higher-priced models), pricing discipline, and structural cost reduction.

We attended Tata Motors’ (TTMT) virtual analyst meet for its JLR business. JLR continues to face several headwinds, such as tariff wars and resultant USD depreciation vs. GBP, uncertainty over EV transition, challenging market conditions in China, and rising warranty costs.

We attended Tata Motors’ (TTMT) analyst meet for India business. TTMT expects CV industry volumes to grow at a slower CAGR of 3-5% over the next five years relative to average freight demand CAGR of 5-7% due to the impact of dedicated freight corridors (DFCs).

We attended Tata Motors’ (TTMT) analyst meet. For its JLR business, the US continues to do well alongside recovery green shoots in the EU market. TTMT maintained its EBIT margin guidance of 10% for Q4FY25.

TTMT’s Q3 performance was below expectations driven by sequential ASP decline at JLR and standalone operations, as well as lower than expected margin expansion in JLR (JLR margin up by 244bps QoQ to 14.2%, consolidated margin stable at 11.5%)

JLR has maintained its full-year guidance despite subdued performance in Q2FY2025.

JLR reported a 10% y-o-y decline in volumes in Q2FY2025 due to production constraint.

JLR reported ~10% drop in Q2 wholesales at 87K units amid issues at a key aluminum vendor; however, it expects production and wholesales to grow strongly in H2 amid supply normalization.

Supply-side issues limit wholesales; retails (including JV) decline 3% YoY

We upgrade TTMT to BUY from Add, keeping our SoTP-based TP unchanged at Rs1,175/sh (incl. roll-over to Sep-26E). TTMT stock price has corrected 16% from its peak, amid outlook downgrade at peer BMW.

Tata Motors (TTMT) reported a strong consolidated performance in 1QFY25, with margins expanding ~110bp YoY to 14.4% (est. 13.3%), driven by JLR and strong India CV business margins.

While there is no doubt that TTMT has delivered an extremely robust performance across its key segments in FY24, there are clear headwinds ahead that could hurt its performance, especially at JLR. The stock trades at 17x/14.6x FY25E/FY26E consolidated EPS and 5.9x/4.9x EV/EBITDA.