Tata Motors Q4 Results Review: Motilal Oswal Maintains 'Neutral' On Multiple Headwinds, Lack Of Triggers

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Motilal Oswal Report

Tata Motors Ltd.'s Q4 FY25 performance was in line with our estimates, with consolidated Ebitda margin at 13.9%, down 30bp YoY. While Jaguar LandRover and passenger vehicle business margins were in line, commercial vehicle segment margins missed estimates due to higher employee and product development costs.

JLR is facing multiple headwinds, which include:

1. tariff-led uncertainty for exports to the US,

2. demand weakness in key regions like Europe and China, and

3. rising VME, warranty and emission costs.

As a result, we expect margin pressure to persist for JLR and factor in a 100bp margin decline over FY25-27E. Even in India, both CV and PV businesses are seeing moderation in demand. Given these headwinds, we have lowered our earnings estimates for Tata Motors by 12%/5% for FY26/FY27. For the lack of any triggers, we reiterate Neutral with FY27E SOTP-based target price of Rs 690.

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