Buy Tata Motors; target of Rs 520: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Tata Motors

In 3QFY23, Tata Motors’ (TTMT) consolidated revenue surprised at Rs 885bn (+11% QoQ) led by better-than-expected average realizations at JLR (+9% QoQ) and CV business (+11% QoQ). Product mix at JLR improved sequentially driven by increase in mix of Defender, New Range Rover (RR) and RR Sport. Currently, JLR has an order book of 215k units of which 74% is contributed by these models and we expect this mix to further improve over the next year. We expect JLR to ramp up its production as supply issues further subside. On the domestic side, CV demand outlook remains strong, especially for MHCVs and passenger carriers. PV market share remains strong at 14% and EV at 85%. We maintain positive stance on TTMT as (1) Volume ramp-up at JLR is expected to help revenues, profitability and drive FCF generation aided by strong order book. Domestic traction looks good led by 1) CV segment benefits from ongoing upcycle, operating leverage and tailwinds from lower commodity costs & discounting and (3) Strong momentum in market share in PV segment (14.1% vs 6.9% in FY19) led by revamped portfolio, customer preference for SUVs and rising EV penetration.

Outlook

Maintain BUY with SoTP based TP of Rs 520 (Sep-24 valuations).

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Tata Motors - 27 -01-2023 - prabhu