Tata Motors, Tata Steel, SRF, Sagar Cements, Happiest Minds, Relaxo Q4 Results Review: HDFC Securities

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HDFC Securities Institutional Equities

Tata Motors - Management delays FY26 guidance on tariff uncertainity

JLR’s Q4 FY25 Ebit margin, at 10.7%, improved 158bps QoQ, led by operating leverage and continuing lower depreciation on extended use of ICE platforms amidst the delay in EV launches. Management indicated that it had pushed wholesales to the US in Q4 on anticipation of higher tariffs.

Additionally, as per media articles, the company had paused JLR shipments to the US for almost a month in Q1 FY26, on the back of higher tariffs.

Hence, we expect Q1 volumes to be subdued. Management gave no guidance for FY26, postponing the same to the investor day event, which is almost a month away. This was due to nonclarity around the fine print of the US-UK deal and in anticipation of the USEU deal.

Tata Steel - Ebitda margin recovery to continue

We maintain Buy on Tata Steel with an unchanged target price of Rs 155/share (6.5x its FY27E consolidated Ebitda). The company delivered 4% YoY volume growth, mainly on ramp-up in the TSK unit. Lower costs led to consolidated unit Ebitda recovery by 3% QoQ to Rs 7,874/MT. Standalone Ebitda/metric tonne however fell 12% QoQ to Rs 12,463/MT.

With improvement in steel prices in Q1 FY26 and lower coking coal costs and other ongoing cost takeouts, margin should recover in FY26. The company has guided for ~5% consolidated volume growth in FY26E, driven by TSK ramp-up. The ongoing expansions projects are on track.

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