Emkay Global Financial's research report on Tata Motors
TTMT’s consolidated Q1 performance beat our estimates, driven by ~210bps QoQ JLR EBIT margin expansion to 8.5% (higher than the 6% FY24 guidance; underlying margins at 7.5%, adjusted for the higher ~10K units production for planned shutdown in 2Q). While domestic CVs are likely to peak-out over FY23- 25E, JLR outlook remains healthy, given the strong focus on mix, realizations and profitability, supported by a high order book; similarly, 2 new SUV launches are expected to drive performance in the Indian PV business 4QFY24 onwards.
Outlook
We introduce FY26 estimates and upgrade FY24E/FY25E consol EPS by 84%/45% (reflecting sustained higher margins at JLR) and maintain BUY, with revised SOTP-based TP of Rs750/share (Rs605 earlier), based on FY25E.
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