Apr'25 View on Tata Motors Ltd

Tata Motors Group is a leading global automobile manufacturer. Part of the illustrious multi-national conglomerate, the Tata group, it offers a wide and diverse portfolio of cars, sports utility vehicles, trucks, buses and defence vehicles to the world. It has operations in India, the UK, South Korea, South Africa, China, Brazil, Austria and Slovakia through a strong global network of subsidiaries, associate companies and Joint Ventures (JVs), including Jaguar Land Rover in the UK and Tata Daewoo in South Korea. Though the stock has fallen to 615 level due to tariff imposed by US, the stock looks to gain back the level of 800 and above on back of following inputs • JLR: Reported EBIT margin improved to 9% (20 bps yoy) in Q3FY25. • Domestic PV business EBITDA margin was 80 bps above our expectations. • Q3FY25: Consolidated EBITDA below our estimate; weak JLR/CV performance. • Q3FY25: PV business performance came above expectations. • JLR has trimmed its revenue guidance marginally, while maintaining EBIT/FCF guidance for FY25E. • We expect near term to remain challenging and believe demand trends will gradually improve across the three business segments. • We expect earnings per share to grow by 15.1% in FY26E & by 23.8% in FY27E. • We retain ADD rating with a revised fair value of Rs825.