Tata Motors Shares Gets 'Neutral' Rating From Motilal Oswal, Sees Lack Of Triggers

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Motilal Oswal Report

We attended Tata Motors Ltd.’s analyst meet for India business. Tata Motors expects commercial vehicle industry volumes to grow at a slower CAGR of 3-5% over the next five years relative to average freight demand CAGR of 5-7% due to the impact of dedicated freight corridors (DFCs).

In the long run, Tata Motors aims to have resilient margins and healthy returns across CV cycles. For FY27, Tata Motors aims to achieve 40% share in commercial vehicles and deliver Ebitda margin in teens with high RoCE. In passenger vehicles, Tata Motors targets to outperform industry growth in FY26 on the back of its new launches.

With new product launches, the company expects to achieve 16% market share by FY27 in PVs and 18-20% in the next two-three years. Tata Motors targets to deliver double-digit Ebitda margin in overall PVs by FY27. While it has set an ambitious target for both domestic CV and PV businesses, execution is the key monitorable given the weak demand environment and rising cost pressure.

We refrain from changing our estimates at this stage. Further, Jaguar Land Rover continues to face multiple headwinds due to the tariff-led uncertainty in its key markets.

As a result, management has refrained from giving any guidance for FY26 and beyond. For the lack of any triggers, we reiterate Neutral with FY27E SOTP-based target price of Rs 690.

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