Emkay Global Financial's research report on Tata Motors
JLR reported ~10% drop in Q2 wholesales at 87K units amid issues at a key aluminum vendor; however, it expects production and wholesales to grow strongly in H2 amid supply normalization. Commentary around volume rebound is encouragingly divergent from luxury peers, who have recently downgraded their outlook citing demand weakness in China. We reaffirm our positivity on the stock, given: i) structural improvements across operational parameters at JLR (on track for becoming net-debt free in FY25E), and ii) healthy India outlook (particularly in CVs amid impending cyclical recovery and strong margin uptick). TTMT’s BS is healthy with least-demanding valuations among OEMs.
Outlook
We cut FY26E/27E EPS by ~2% (5%/10% revenue/PBT CAGR) on slight margin reduction, and reiterate BUY with unchanged SoTP-based TP of Rs1,175/sh.
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