Motilal Oswal Downgrades Tata Motors PV to ‘Sell’ Amid JLR Woes

Motilal Oswal has downgraded Tata Motors Passenger Vehicles (TMPVL) to a ‘Sell’ rating with a target price of ₹312, implying a ~20% downside, citing deepening challenges at Jaguar Land Rover (JLR) and sustained margin pressure. JLR posted a multi-year low EBITDA margin of -1.6% in Q2, dragging Tata Motors into a consolidated loss of ₹55,000 crore. The brokerage attributes this to the cyberattack-induced production loss (20,000 units in Q2, 30,000 expected in Q3), soft demand in China, US, and Europe, rising discounts, higher warranty costs, and adverse impacts from US tariffs and China’s luxury tax. Management has sharply cut FY26 guidance—now expecting EBIT margin of 0–2% and free cash flow of GBP -2.2 to -2.5 billion. Motilal Oswal now forecasts JLR’s EBIT margin to recover only gradually to 5% by FY28, below earlier expectations of 6.5%. While the domestic PV business remains stable, contributing in-line performance, it is too small to offset JLR’s valuation drag. With limited near-term recovery visibility, the brokerage sees continued headwinds through H1 FY26, despite expectations of easing discounts and better volumes in Q4. The demerger of TMPVL hasn’t insulated investor sentiment from JLR’s global struggles, making the standalone PV stock vulnerable to ongoing profitability concerns.