Jefferies has retained an ‘Underperform’ rating on Tata Motors, setting a target price of ₹600 per share, citing a weaker-than-expected outlook presented by Jaguar Land Rover (JLR) during its investor day.
According to the brokerage, JLR has guided for a lower EBIT margin of 5–7% for FY26, compared to 8.5% in FY25, and expects free cash flow to remain near zero, down from £1.5 billion in FY25. This has prompted Jefferies to cut its FY26–28 EPS estimates by 12–19%.
While JLR continues to focus on strengthening brand positioning and cost control, several macroeconomic and industry-specific challenges are weighing on the outlook, including:
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Trade and technology protectionism
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A weaker US dollar
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Macroeconomic headwinds in China
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Transition to battery electric vehicles (BEVs)
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Stringent emission regulations
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High warranty-related expenses
Jefferies believes these headwinds could significantly pressure margins and limit upside in the near term, keeping the risk-reward unfavorable.
Disclaimer: The views expressed in this article are those of the brokerage firm and do not constitute investment advice by Business Upturn. Investors are advised to consult their financial advisors before making any investment decisions.