Tata Motors Passenger Vehicles Ltd. received a sharp target price cut from multinational brokerage HSBC over negative outlook for Jaguar Land Rover and Middle East exposure. The 12-month target price has been revised to Rs 340 from Rs 400, with rating maintained at 'hold'. The new target implies a return potential of 8% over the previous close.
Analysts said JLR's weak performance overshadows growth in the India business. The Middle East exposure, which contributes nearly 5-6% of JLR volumes, and rising raw material costs have further added to the woes. The premium unit's recovery in the near term appears "challenging", they said in a note.
According to HSBC, it is unlikely that JLR will be able to sell more than 35,000 units per month over the foreseeable future, given subdued China luxury car market, tariff increases in the US and competitive pressure.
For FY26, analysts forecast JLR will suffer negative free cash flow due to tepid volumes and ongoing capex.
Domestic Market
HSBC said Tata Motors PV's India business benefits from strong Sierra and incremental demand for Harrier and Safari petrol models. But raw material inflation is a risk to operating margins.
"While the company has implemented a 100 bps price increase, we estimate this will still be insufficient by 100-150 bps to fully offset raw material cost inflation. Positively, average 4Q discounts are lower than in 3Q," the note said.
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Tata Motors PV Share Price Movement
Tata Motors PV share price were steady during early trade on Tuesday. The benchmark Nifty 50 was flat. The relative strength index was at 29, indicating the stock may be oversold.
The stock is down 14% on a year-to-date basis.
Eleven out of the 34 analysts tracking Tata Motors PV have a 'buy' rating on the stock, 13 recommend a 'hold', and 10 suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets is Rs 381, which implies a potential upside of 22%.
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