Tata Motors’ share price finally saw some gains after falling for the past trading sessions. The stock rose 3.4% to an intra-day high of Rs 670, although it has fallen 14% year to date. The surge in stock price came after the positive brokerage views on its subsidiary Jaguar and Land Rover (JLR).
Nomura on Tata Motors: JLR’s premiumisation and India CVs progressing well
JLR’s performance has been resilient with volumes and margins holding well despite tough market conditions, said Nomura. The Street is currently concerned about tariff risks though. A trade deal between the UK and the US will be positive for the stock. “We estimate EBIT margins for FY25F/26F/27F at 8.6%/8.1%/8.9% and value JLR at 1.5x FY27F EV/EBITDA,” read a report by Nomura on Tata Motors. The company’s management was sounding confident over the luxury journey for JLR and meeting Q4 FY25 guidance of achieving 10% EBIT margins and being net debt-free by the end of FY25, according to the report. The performance of buses has picked up as Tata Motors has performed well on MHCVs. Small commercial vehicles’ performance needs a sharper focus, which will be the key agenda for this year. “Overall, CV margins should continue on improving trajectory.” The brokerage has a ‘Buy’ call on the stock, with a target price of Rs 861.
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After meeting the company’s management, Nuvama Institutional Equities said JLR is on track to achieve FY25 EBIT margin guidance of at least 8.5% and turn net cash positive. Moving ahead, JLR’s FY26 volume performance is likely to be stressed due to discontinuation of Jaguar models, and subdued outlook in the China region, even though Land Rover’s performance is likely to outpace the underlying industry. Owing to this argument, the brokerage firm retained its ‘Reduce’ rating on the stock, with a target price of Rs 720. Moreover, the company’s focus is on expanding the service network. “We build revenue/EBITDA CAGR of 2% over FY25–27,” said Nuvama.
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Taking a different stance on JLR, the brokerage firm said that the subsidiary balances premiumisation with volume growth,
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