Tata Motors Q3 Review: Target Price Cut By Analysts Amid Concerns Over JLR Performance

Brokerages on Thursday have cut the target price for Tata Motors Ltd., one of India’s leading automotive manufacturers following its third-quarter results. While the company has generally met expectations, analysts have also adjusted their growth forecasts, citing concerns over performance in key segments, particularly Jaguar Land Rover.

The revisions reflect a mix of challenges in the global market, including uncertainties in China and weaker-than-expected performance in JLR’s revenue and margins, while some positive surprises in Tata Motors’ electric vehicle business have provided a counterbalance.

Goldman Sachs has revised its target price for Tata Motors, lowering it to Rs 800 from Rs 830, following a third-quarter performance that met expectations. The company remains on track to meet its full-year guidance of 8.5% growth, despite some challenges in the JLR segment. JLR’s revenue guidance has been revised down by 3% to 29 billion pounds from the previously forecasted 30 billion pounds by the brokerage, largely due to ongoing uncertainties in the Chinese market.

However, an unexpected margin surprise in the company’s electric vehicle business has partially offset these concerns. Goldman Sachs expects modest volume growth from JLR and passenger vehicles segments, with low teen Ebitda growth projected over financial years 2025-2027.

Morgan Stanley has also lowered its target price for Tata Motors, reducing it to Rs 853 from Rs 920, maintaining an 'equal-weight' stance. The miss in the third quarter was primarily due to weaker-than-expected average selling prices for JLR.

While JLR’s Ebit margin guidance for financial year 2025 has been maintained, the firm has lowered revenue and ROCE expectations slightly. The weaker-than-expected performance in the JLR and India PV segments, along with challenges in the Chinese market and uncertainties around tariffs and emissions regulations, led Morgan Stanley to reduce its earnings per share estimates by 6-9%.

Nuvama, too, has cut its target price for Tata Motors to Rs 720 from Rs 750, citing margin misses in both JLR and the India CV division. The firm has reduced its financial year 2025 Ebitda estimate by 4%, following JLR's revenue guidance cut and expects muted revenue and Ebitda growth over financial year 2025-2027, with a 1% CAGR for the India CV segment.

Citi’s analysis of Tata Motors highlights a mixed performance for the third quarter, mainly due to weaker results in the India PV and CV segments, despite JLR meeting expectations.

The outlook for JLR remains positive, especially with upcoming EV launches, although concerns about China demand persist, the brokerage said.

Citi remains cautious about near-term outlooks for both segments, noting that growth in financial year 2026 will depend on government policies, including industrial and infrastructure capex.