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The brokerage has an “outperform” rating on the stock, with a price target of ₹1,278, which implies a 60% upside from current levels. This is also the second-highest price target for Tata Motors on the street.
Shares of Tata Motors have corrected 32% from their previous high of ₹1,179 and Macquarie’s price target is higher than those levels.
Macquarie said that the key positive for JLR’s Q3 sales figures was its healthy product mix with premium models accounting for 70% of the total sales compared to 62% in December 2023 and 67% in September 2024.
While retail sales in China fell 41% from last year, ex-China, they grew by 3% from last year, driven by the North American market.
Macquarie wrote in its note that the JLR earnings trajectory and cash flows, growth in the domestic Commercial Vehicles business and Passenger Vehicle margins are the key factors to track for Tata Motors from here on.
Morgan Stanley too expects a 15% upside for shares of Tata Motors, while maintaining its “equalweight” rating with a price target of ₹920. It said that JLR’s wholesale volumes for the quarter were ahead of their estimates.
The brokerage expects a 9.6% EBIT margin for JLR for the current quarter and in order to meet its financial year 2025 margin guidance of 8.5%, JLR will have to report an EBIT margin of 9.5% in the fourth quarter, according to Morgan Stanley, who also added that the margin guidance for financial year 2026 will be a key trigger to watch.
Nomura has a “buy” rating on Tata Motors with a price target of ₹990, which implies a potential upside of 25% from current levels.
The brokerage is expecting free cash flow of £250 million in the third quarter led by higher volumes.
From having a net debt of ₹22,000 crore or ₹60 per share in the second quarter, Tata Motors may move to a net cash of ₹86 per share by financial year 2027, according to Nomura.
At 4.2 times financial year 2027 Enterprise Value to EBITDA, Nomura believes Tata Motors’ valuations are attractive.
Out of the 36 analysts who have coverage on Tata Motors, 22 of them have a “buy” rating, nine of them say “hold”, while five of them have a “sell” rating on the stock.
Shares of Tata Motors ended 0.3% higher on Wednesday at ₹795.5.
