Shares of Tata Motors Ltd partially recovered from their Q3 earnings shock in early trade on Friday. Tata Motors stock rose over a per cent to Rs 707.40 against the previous close of Rs 697 on BSE. Market cap of the Tata Group firm rose to Rs 2.59 lakh crore. Tata Motors stock closed 7.37% lower at Rs 697 on Thursday after the company's earnings came below estimates on weak JLR performance. This was the first time since November 28, 2023, the Tata Motors stock closed below the Rs 700 level.
The stock fell to a 52-week low of Rs 684.25 previous session marred by weak Q3 earnings.
Incred Equities has a reduce rating on the stock. It has assigned a price target of Rs 661 to the stock.
"The sharp 40% stock price correction from its Aug 2024 peak has eased the forward P/BV valuation close to the 10-year mean level. However, building in the sharp cut in our estimates, we lower our sum-of-the-parts or SOTP-based target price to Rs 661 (from Rs 746 earlier). With tariff challenges in global trade and volatile currency movement, JLR will be vulnerable, despite its improved product mix and new vehicle launch plans. Increased competition in India’s electric car and small truck segments are a cause of concern. We maintain our REDUCE rating on Tata Motors. Key upside risks: Success of new products and demand stimulus benefits," said Incred Equities
CLSA has a price target of Rs 980 for the stock.
YES Securities has price target of Rs 892 against the previous Rs 948 on the auto stock.
"We have liked Tata Motors given it’s improving India franchise, early leadership in EVs in India, and JLR’s improved profitability. However, standalone business is in the midst of cyclical volume moderation both in PV and CV whereas heightened competition in EVs can drag earnings momentum in S/A. We increase FY26/27 consol EPS by 4-5% to reflect upon PLI incentives while likely muted volumes at JLR, increased VME partially impact consolidated earnings. We maintained ADD with revised Mar’27 SOTP based target price of Rs 892 (v/s Rs 948 earlier). Despite sharp correction recently, we would still wait for better entry point," said YES Securities
Global brokerage firm Jefferies has downgraded Tata Motors stock to "underperform" from its earlier rating of "buy". The brokerage also sharply reduced its price target to Rs 660 from Rs 930 earlier.
Its UK arm JLR faces weak demand in China and Europe, along with a rise in customer acquisition costs and higher warranty expenses, Jefferies said adding the Tata Group firm faces a slowdown in demand for both commercial and passenger vehicles. Rising competition in the electric vehicles space act is also a risk for its EV business.
Q3 profit slipped 22% YoY to Rs 5,451 crore from Rs 7,145 crore in year ago period. A sharp slowdown in its luxury Jaguar-Land Rover business, fall in margins and a cautious demand outlook for key markets like China affected Q3 performance of the Indian carmaker.
However, revenue from operations climbed 3% YoY to Rs 1.13 lakh crore. Consolidated EBITDA during the third quarter came in at Rs 15,500 crore.
The company’s revenue slipped 4.3% year-on-year to Rs 12,400 crore in the passenger vehicle segment but the segment’s EBITDA rose 120 basis points. In the commercial vehicle segment, revenue slipped 8.4% year-on-year to Rs 18,400 crore.