Buy Tata Motors; target of Rs 328: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Tata Motors

Q3FY21 consolidated PAT improved by a stellar 91.4% y-o-y, driven by a rich product mix, better-than-expected rise in gross margins and strong cost-control measures in JLR and standalone businesses. We expect TAMO’s earnings to get positive in FY2022E and 38.1% in FY2023E, driven by a 15.2% revenue CAGR during FY2021E-FY2023E and a 140-bps improvement in EBITDA margin. Stock trades at an attractive at P/E multiple of 10.3x and EV/EBITDA multiple of 3x its FY2023E estimates.

Outlook

We recommend a Buy on Tata Motors with a PT of Rs. 328, considering resilient numbers in Q3FY21, all-round strong performance, robust FCF for JLR and standalone businesses, sharp fall in debt and better earnings visibility.

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