- Tata Motors Passenger Vehicles' total sales rose 23% year-on-year in October 2026
- Citi Research cut Tata Motors' target price to Rs 270 and kept a 'Sell' rating
- Rising costs and JLR's transition uncertainty weigh on profitability and margins
Tata Motors Passenger Vehicles (TMPV) reported a 23% year-on-year (YoY) increase in total sales in October 2026, but the strong volume momentum has not persuaded Citi Research to turn positive on the stock.
The brokerage has cut its target price to Rs 270 from Rs 305, lowered its valuation multiple for the India passenger vehicle business and retained its ‘Sell' rating, on the back of mounting cost pressures and uncertainty over Jaguar Land Rover's (JLR) transition.
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Citi's assessment highlighted a growing disconnect between sales growth and profitability. While healthy industry demand and encouraging market-share gains are supporting volumes in the domestic business, escalating costs are expected to weigh on margins. For JLR, Citi believes, higher marketing and publicity expenses associated with new model launches are likely to put pressure on profitability.
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The revised sum-of-the-parts (SOTP) target price of Rs 270 implies a downside of 2.2% from the prevailing share price, according to Citi.
Citi Cuts India PV Valuation Multiple, Trims JLR Margin Estimates
Citi has reduced its EBITDA estimates for Tata Motors' India passenger vehicle business, arguing that healthy volumes are being more than offset by lower margins amid rising cost pressures.
"Even though our revenue estimates increase slightly, there are sharp cuts in EBITDA estimates," the brokerage said.
It has also cut the target enterprise value-to-EBITDA multiple for the India PV business to 13 times from 17 times, while maintaining a 10% discount to Maruti Suzuki's implied target multiple.
For JLR, Citi has retained its volume estimates but lowered margin projections to factor in higher marketing and publicity expenses as new models are launched in FY28 and FY29.
The brokerage's revised SOTP target price also factors in the changes to its estimates, the lower valuation multiple for the domestic business and a roll-forward of its valuation horizon to March 2028 from September 2027.
"Weak domestic margins and uncertainty on JLR's transition prevent us from being more constructive," Citi said, reiterating its ‘Sell' rating.
October Sales Rise 23%, Domestic Market Drives Growth
Tata Motors Passenger Vehicles reported total sales of 75,426 units in the domestic and international markets in October 2026, compared with 61,295 units in the corresponding month last year.
Domestic passenger vehicle sales increased 21% to 73,894 units from 61,134 units a year ago. International business sales stood at 1,532 units, compared with 161 units in October 2025.
The company's electric vehicle business recorded a sharper increase, with combined domestic and international sales rising 75% year-on-year to 16,244 units from 9,286 units.
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