Following the recent Jaguar Land Rover (JLR) investor day, top global and domestic brokerages have shared their latest views on Tata Motors, revealing a mixed sentiment with both optimism and caution surrounding the stock's future trajectory.
Morgan Stanley: Equal-weight, Target Price ₹715
Morgan Stanley has maintained its "Equal-weight" rating on Tata Motors with a target price of ₹715. The brokerage highlighted that, unlike previous downcycles, JLR is currently much stronger across all fronts. However, it also flagged that the earnings turnaround will likely be gradual. FY26 may witness earnings downgrades as the company navigates through a tough macro environment. Additionally, Morgan Stanley's FY26 EPS estimate is 8% below the consensus expectations, indicating a more cautious outlook compared to the broader market. The firm emphasized that Free Cash Flow (FCF) remains a crucial metric, particularly for companies in a low-growth phase.
Jefferies: Underperform, Target Price Cut to ₹600
Jefferies continues to maintain an "Underperform" rating on Tata Motors, further cutting its target price to ₹600 from ₹630. While acknowledging Tata's active efforts in strengthening its franchise both in India and JLR globally, Jefferies remains concerned about multiple headwinds affecting its businesses. The brokerage pointed out that India’s commercial vehicle (CV) demand has slowed considerably, while rising competition in the electric passenger vehicle (PV) segment poses another challenge for the company. These factors, according to Jefferies, warrant a more conservative outlook on the stock.
Motilal Oswal: Neutral, Target Price ₹690
Motilal Oswal has taken a "Neutral" stance with a target price of ₹690. The brokerage cut JLR’s EBIT margin guidance for FY26 to 5-7%. Consequently, the FY26 EBIT margin estimate was reduced to 6% from the earlier 6.9%, resulting in a 10% downward revision in FY26 earnings estimates. However, estimates for FY27 remain intact as Motilal Oswal awaits fresh triggers that could drive the stock upward.
CLSA: Outperform, Target Price ₹805
In contrast to the more conservative views, CLSA remains bullish with an "Outperform" rating and a target price of ₹805. CLSA expects JLR’s profitability to witness meaningful improvement from FY27 onward, driven by better scale and cost-saving initiatives that should enhance overall margins and financial performance.
Out of the 35 analysts tracking Tata Motors, 17 have a "Buy" recommendation, 12 have a "Hold," while 6 maintain a "Sell" call on the stock. This split reflects the ongoing debate in the market regarding Tata Motors' growth trajectory amidst both macro and sector-specific challenges.
Despite broader market strength, Tata Motors continues to significantly underperform benchmark indices. While Nifty 50 is just 5-6% away from its all-time high, Tata Motors stock remains nearly 40% down from its peak levels. This persistent underperformance highlights growing investor concerns over the company's short-term prospects. Adding to the pressure, Tata Motors' monthly sales have been declining consistently, indicating a slowdown in domestic car demand. The Indian passenger vehicle market, once growing robustly, appears to have entered a ‘pause mode’ as consumer sentiment weakens.
On the previous trading day, Tata Motors shares closed 4% lower, falling below the crucial ₹700 mark, further denting investor sentiment.
Disclaimer:
The information provided in this article is for informational purposes only and reflects opinions from multiple brokerage reports and public data. It should not be considered as financial advice or a recommendation to buy or sell any security. Please conduct your own due diligence or consult a qualified financial advisor before making any investment decisions. The author and platform assume no responsibility for any losses incurred.
