Morgan Stanley has reiterated its Equal-weight rating on Tata Motors with a target price of ₹715, suggesting a modest upside of 3.8% from the current market price of ₹688.50. The brokerage noted that while volume growth faces pressure, the company is benefiting from a stronger product mix and pricing strategy, particularly in its Jaguar Land Rover (JLR) business.
According to Morgan Stanley, Tata Motors is expected to see an 8% quarter-on-quarter improvement in average selling prices (ASPs), aided by a sharp improvement in mix and price hikes. This is expected to partly mitigate the impact of newly imposed U.S. tariffs on electric vehicle components and exports.
For Q1FY26, the brokerage projects JLR’s EBITDA and EBIT margins at 11.4%, supported by premium model sales and operational efficiencies. However, it expects the consolidated business margin to decline by 350 basis points year-on-year to 10.9%, reflecting broader input cost pressures and weakness in the domestic commercial vehicle segment.
Morgan Stanley continues to take a balanced view, noting Tata Motors’ strengths in product portfolio and international exposure, while remaining cautious on margin pressures and external risks.
Disclaimer: The views expressed above are those of Morgan Stanley and do not constitute investment advice. This article is for informational purposes only.
