Accumulate Tata Motors; target of Rs 1156: KR Choksey

KR Choksey's research report on Tata Motors

In Q1FY25, TML revenue stood at INR 1,080,480 Mn, which grew by 5.7% YoY/(-9.9% QoQ), missing our estimates by 2.3%. The YoY revenue growth was primarily driven by a 2.6% YoY increase in volume, reaching 327,646 units. TML-CV revenue grew by 5.0% YoY/ (-17.3% QoQ), while TML-PV revenue decreased by 7.7% YoY (-17.9% QoQ). EBITDA stood at INR 155,090 Mn, up 14.4% YoY/ (-8.7% QoQ), outperforming our estimates by 5.5%. In Q1FY25, PAT was INR 55,660 Mn (+73.8% YoY), which outperformed our estimates on the back of better operating performance partially offset by a higher tax rate in Q1FY25.

Outlook

We maintain our EV/EBITDA multiples across segments. We expect the CV and JLR segments will contribute to overall stability in performance. Consequently, we have revised our target price to INR 1,156/share (previously: INR 1,043). With an 8.2% upside potential, we reaffirm our “ACCUMULATE” rating on Tata Motors shares.

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