Tata Motors share climbs on JLR update; should you buy this stock amid tariff war?

Shares of Tata Motors Ltd climbed 3 per cent in Wednesday's trade after a host of stock brokerages met Group CFO PB Balaji, who assured analysts that the British arm Jaguar Land Rover (JLR) is on track to achieve FY25 EBIT margin guidance of at least 8.5 per cent and turn net cash positive. A few analysts, however, are mixed over FY26 outlook, with their price targets for the Tata group stock ranging in the Rs 700-860 band.

On Wednesday, the stock was trading 3.41 per cent higher at Rs 670. The stock is down 10.72 per cent in 2025 so far and 32.16 per cent in the past six months. "With its recent stock price correction, we upgrade Tata Motors to Buy (from Add) with a SoTP-based unchanged target of Rs 831," said ICICI Securities.

The focus remains on the transition of JLR into a luxury brand. Nomura India said the management is confident over the luxury journey for JLR and meeting Q4 guidance of achieving 10 per cent EBIT margins and be net debt-free by end-FY25. Nomura said Tata Motors plans to improve service network as the volume of cars has grown significantly in India, which has impacted service experience. It also plans to improve product quality. On the CV segment, the management expects margins should be on an improving trajectory.

"JLR’s performance has been resilient with volumes and margins holding well despite tough market conditions. The Street is currently concerned about tariff risks though. A trade deal between the UK and the US will be positive for the stock. Recent news reports indicate that US president, Trump sees the possibility that UK may not have to face tariffs and trade deal could happen quickly," Nomura said while suggesting a 'Buy' on the stock.

It has a target of Rs 861 on the stock.

Unlike most other OEMs that have issued profit warnings, MOFSL said Tata Motors management has maintained its FY25 guidance. In the Indian CV segment, while the business has performed well across most parameters, the primary focus would be on regaining lost share in SCVs.

"In the Indian PV segment, apart from upcoming new launches, the company will focus on improving its service capabilities. However, we continue to remain on the sidelines regarding this company, given the uncertainties around threat from potential US tariff levies, weak global macro conditions, and the ramp-up of margin-dilutive EV business," MOFSL said.

In the absence of any triggers, this brokerage suggested 'Neutral' on the stock with December 2026 SOTP-based target of Rs 705.

Nuvama said JLR’s FY26 volume performance is likely to be stressed due to discontinuance of Jaguar models, and subdued outlook in China region even though Land Rover’s performance is likely to outpace underlying industry. It said JLR will have to offset the impact of any tariff hike through price hikes and cost savings. It said FY26 India PV volume growth would be driven by repositioning of Currv model and launch of Harrier EV along with Sierra models.

"We build revenue and Ebitda CAGR of 2 per cent each over FY25–27. Retain ‘REDUCE’," it said while suggesting a target of Rs 720.