Brokerages have mixed views on Tata Motors, with concerns around the company’s commercial vehicles (CV) segment but optimism surrounding Jaguar Land Rover (JLR) guidance. Here’s a summary of the latest recommendations:
| Brokerage | Rating | Target Price | Key Highlights |
|---|---|---|---|
| CLSA | Outperform | ₹968 | Upgraded to ‘Outperform’; management confident in JLR’s EBIT margin guidance for FY25 & FY26. Cautious on CVs but expects new passenger vehicle (PV) launches to drive growth. |
| UBS | Sell | ₹780 | Lowered target due to disappointing JLR and CV performance, although PV segment met expectations. Reduced free cash flow (FCF) guidance to £1.3 billion from £1.8 billion. |
| Nomura | Buy | ₹900 | Target reduced; despite weaker Q2, JLR guidance was maintained. Expects strong JLR rebound in H2FY25 and likely recovery in India’s CV segment by Q4. |
| Jefferies | Buy | ₹1,000 | Lowered target, though JLR anticipates a strong H2 with FY25 margin guidance intact. However, India’s CV and PV demand has slowed, leading to a 2-9% cut in FY25-27 EPS estimates. |
Key Brokerage Insights
- CLSA: Upgraded Tata Motors to ‘Outperform’ with a target price of ₹968. CLSA is optimistic about JLR’s EBIT margin guidance for FY25 and FY26, while management remains cautious on the CV segment. New PV launches are expected to be a growth driver.
- UBS: Maintains a ‘Sell’ rating, citing disappointing performance in JLR and the CV segment, while PV performance aligned with expectations. UBS highlighted a reduction in FCF guidance to £1.3 billion from £1.8 billion, reflecting challenges in cash flow generation.
- Nomura: Retains a ‘Buy’ rating with a target of ₹900, adjusted from a previous target of ₹1,303. While Q2 results were below expectations, Nomura notes that JLR guidance remains intact. A strong JLR rebound is expected in H2FY25, with India’s CV segment likely to recover by Q4.
- Jefferies: Holds a ‘Buy’ stance with a revised target of ₹1,000, noting that JLR expects a strong H2 while maintaining its margin guidance for FY25. However, the brokerage observes a slowdown in demand for both CV and PV segments in India and has cut EPS estimates by 2-9% for FY25-27.
Brokerages remain mixed on Tata Motors, with optimism around JLR’s performance offset by concerns in the CV segment and a cautious outlook on PV demand. Target prices vary significantly, reflecting divergent expectations on JLR’s ability to drive overall performance.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
