CLSA has upgraded Tata Motors to High Conviction Outperform, keeping its target price unchanged at ₹930 per share. The brokerage believes the recent 40% correction in Tata Motors’ stock over the past six months presents an attractive buying opportunity.
Concerns over a weak demand outlook and potential US import tariffs on European Union (EU) vehicles have weighed on sentiment. The Jaguar Land Rover (JLR) business, which contributes 25% of retail sales in the US, remains a key factor behind the stock’s recent underperformance.
However, CLSA argues that JLR is currently trading well below its fair valuation. At the current market price, the implied per-share value of JLR stands at ₹200, significantly lower than CLSA’s ₹450 per share target in its Sum-of-the-Parts (SOTP) valuation.
The brokerage believes there is enough cushion in Tata Motors’ stock price to absorb any potential US tariff hikes or further weakness in demand and margins. It expects a strong recovery and sees the stock as a compelling re-rating candidate.
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Tata Motors