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Motilal Oswal Report
Given significant challenges at JLR and the continued geopolitical uncertainty, domestic brokerage firm Motilal Oswal has reiterated its Sell rating on Tata Motors Passenger Vehicles Ltd. with an SoTP-based target price of Rs 312 per share (based on FY28E).
The brokerage's cautious stance comes despite a constructive outlook on the company's India passenger vehicle (PV) business, where management has outlined an ambitious growth roadmap. Tata Motors aims to achieve 15% volume CAGR and expand market share to over 20% by FY31, driven by new launches, portfolio expansion and network ramp-up.
However, Motilal Oswal noted that near-term profitability may remain under pressure due to a sharp rise in input costs. While the company is targeting cost reductions of 5–6% and incremental operating leverage, these benefits are expected to play out gradually over the medium term.
The brokerage highlighted that JLR continues to face multiple challenges, including weak global demand, elevated cost structures and geopolitical uncertainties. Factors such as US tariff measures, China's luxury tax impact and slowing demand in key regions are expected to weigh on performance.
Although JLR has initiated a significant cost optimisation programme aimed at reducing costs and lowering breakeven levels, Motilal Oswal believes these measures may only partially offset ongoing headwinds, keeping profitability under pressure in the near term.
On the domestic front, Tata Motors' PV business remains a key strength. The company continues to gain market share and is well-positioned to benefit from structural trends such as rising penetration of EVs and CNG vehicles, which are expected to drive a bulk of incremental industry growth over the next five years.
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