Tata Motors’ Q1FY26 results prompted CLSA to retain its Outperform rating with a target price of ₹805, noting that JLR’s EBIT margin came in at 4%, slightly above estimates but down 485 bps QoQ due to negative operating leverage, the US tariff impact, and adverse currency movements.
The commercial vehicle (CV) business posted an EBITDA margin of 12.2%, up 60 bps YoY, while India passenger vehicle (PV) EBITDA margin fell to 4%, down 180 bps YoY as volumes dropped 10%. JLR has maintained its FY26 EBIT margin guidance of 5–7% and aims to remain free cash flow neutral. However, the company remains cautious on FY26 demand due to tariffs and the lower luxury car tax threshold in China. CLSA has factored in a 9% YoY decline in JLR volumes (ex-Jaguar) with a 5.5% EBIT margin.
Disclaimer: The above views are those of the brokerage. Please consult a SEBI-registered investment advisor before making any investment decisions.
