Motilal Oswal's research report on TATA Motors
Tata Motors (TTMT) reported a strong consolidated performance in 1QFY25, with margins expanding ~110bp YoY to 14.4% (est. 13.3%), driven by JLR and strong India CV business margins even as India PV margin missed estimates. Margins were also supported by higher capitalization rate (1Q at 6.2% of revenues v/s 4.6% YoY). However, apart from the risks from subdued global demand and margin headwinds at JLR, recent supplier based constraint may pose as an incremental headwind in the near-term. This, coupled with demand moderation in its India CV and PV businesses, raises concerns about TTMT’s ability to sustain the current-level of profitability going forward. We raise our EPS estimates by 3%/4% for FY25/FY26. The stock trades at 19.1x/16.4x FY25E/FY26E consol. EPS and 7x/5.7x EV/EBITDA. Reiterate Neutral with Jun’26E SOTP-based TP of INR1,025.
Outlook
We raise our EPS estimates by 3%/4% for FY25/FY26. The stock trades at 19.1x/16.4x FY25E/FY26E consol EPS and 7.0x/5.7x EV/EBITDA. Reiterate Neutral with Jun’26E SOTP-based TP of INR1,025.
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