Mumbai, India, January 30, 2025 – Tata Motors' stock is under scrutiny after its Q3 FY25 earnings report, with Morgan Stanley maintaining an Equal-weight rating and setting a target price of ₹853 per share, while CLSA holds an 'Outperform' rating with a target of ₹930, indicating a potential 23% upside from the current price of ₹754.80.
Morgan Stanley noted that Tata Motors' Q3 results fell short of expectations, particularly in key segments, and highlighted challenges for Jaguar Land Rover (JLR) in sustaining growth amid a dynamic market. JLR has retained its FY25 EBIT margin guidance but slightly downgraded revenue and return on capital employed (ROCE) projections. The firm will reassess its FY26 guidance after Q4 FY25 earnings.
Conversely, CLSA expressed optimism about JLR's ability to achieve an EBIT margin of approximately 10% in Q4, raising the full-year margin to around 8.5%. Despite concerns over weak demand in China and increased marketing costs, demand for higher-margin models is seen as a positive factor. However, CLSA has reduced its JLR FY26 volume estimate by 5% due to subdued demand in China and Europe.
Tata Motors' management remains confident about the commercial vehicle segment and expects improved profitability driven by scale, better product mix, and lower warranty costs. Investors are keen to see if the company can meet its guidance amid ongoing global macroeconomic challenges.