Stay 'Neutral' On Tata Motors Says Motilal Oswal Post Q1 Results On Lack Of Triggers — Check Target Price

Tata Motors’ consolidated Ebitda margin of 9.2% in Q1 FY26 came in below our estimate of 10.9% due to weaker-than-expected performance at JLR and India PVs. Consolidated PBT was ahead of estimate due to lower depreciation and lower interest expenses.

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Motilal Oswal Report

Tata Motors Ltd.'s JLR is facing multiple headwinds, which include:

1. tariff-led uncertainty for exports to the US;

2. demand weakness in key regions like Europe and China; and

3. rising VME, warranty and emission costs.

Given these factors, management has refrained from giving any guidance for FY26 and beyond. Given the above headwinds, we expect margin pressure to persist for JLR and have factored in 150bp margin decline over FY25-27E.

Even in India, both commercial vehicle and passenger vehicle businesses are seeing moderation in demand. For lack of any triggers, we reiterate Neutral with June-27E SOTP-based target price of Rs 631.

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