Brokerages have come out with positive commentary on the current and future plans of Tata Motors Ltd. after its investor presentation. Apart from key commentary on each division, the company has given guidance until financial year 2030, something Mahindra & Mahindra Ltd. did as well after announcing in fourth-quarter results.
Passenger Vehicles
Nuvama Research expects the passenger-vehicle volumes to grow in single digits in the current fiscal, with the margin expected to rise from 7% in the last fiscal to over 10% by fiscal 2030.
Jefferies India Pvt. has said the company would be increasing its total addressable market with launches like the mid-size Curvv EV and Harrier EV in the current fiscal. Tata Motors has also guided for a launch of Sierra and Avinya EVs in the next fiscal.
Commercial Vehicles
Emkay Global highlighted that the company expects the domestic commercial-vehicle industry to absorb various past disturbances, with growth outlook improving on favourable macros. Tata Motors expects a 4–5% compound annual growth rate in industry volume over fiscal 2024–29.
Nuvama expects the CV volumes to witness moderation in the current fiscal but grow in the medium term, with Ebitda margin to stay in the double digits. The company's focus will be on profitability and alternate fuels technology.
Brokerage Views
Emkay
Upgrades to 'add' from 'reduce'.
Target price raised to Rs 1,050 from Rs 950 apiece, implying a potential upside of 6% from the previous close.
Improved growth prospects in CVs prompted an upgrade in its target multiple to 12.5 times.
Jefferies
Maintains 'buy' with a target price of Rs 1,250 apiece, implying a potential upside of 28%.
Company reiterated focus on strengthening franchise.
Expects a 13% Ebitda and 23% CAGR in earnings per share.
Target of $4.6-billion net-cash positive by fiscal 2026.
Morgan Stanley
Retains 'equal weight' with a target price of Rs 1,100 apiece, implying a potential upside of 9%.
Northwest dedicated freight corridor should have some impact in heavy CV.
For long-distance trucking, hydrogen is the most-suitable technology.
Tata Motors spent 30–35% of its capital expenditure on new technologies, and it aims to increase this to 40–45% in the current fiscal.
Nuvama
Retains 'reduce' with target price of Rs 940 apiece, implying a potential downside of 4%
Slightly raised Ebitda estimate by 2% for the current fiscal, factoring in better realisation/margin.
The Ebitda estimate for the next fiscal stays unchanged.
Building in moderate revenue/Ebitda CAGR of 9%/13% over fiscal 2024–26 versus 21%/25% over fiscal 2021–24.
Tata Motors' stock jumped as much as 2.35% during the day to Rs 1,010.25 apiece on the NSE. It was trading 0.55% higher at Rs 992.50 per share, compared to the 0.47% advance in the benchmark Nifty at 11:31 a.m.
Twenty-one out of the 33 analysts tracking the company have a 'buy' rating on the stock, eight recommend 'hold' and four suggest 'sell' according to Bloomberg data.
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