HDFC Securities Remains Cautious On Tata Motors Shares; Maintains 'Reduce' Rating

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HDFC Securities Institutional Equities

Tata Motors Ltd. held its investor day on June 09, 2025 to share its future plans for the India commercial vehicle and passenger vehicle businesses. We expect the CV segment to witness growth in FY26, though margins may be impacted in the near term as a result of the safeguard duty on steel.

We expect the PV segment volumes to grow 2.5% in FY26, broadly in line with the industry. The slower EV sales and an ageing portfolio will be partially offset by continuing higher growth in the CNG segment (25% of its PV sales) and new refreshes/launches planned in FY26.

We remain cautious in the near term due to the tariff overhang, subdued global macro, an ageing PV portfolio, slowing EV growth amidst higher competition and moderate growth for CVs.

We value the company on a SOTP basis and a target price of Rs 733; we maintain a Reduce rating.

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