Buy Tata Motors; target Rs 480: ICICIdirect

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26 Aug, 2025 12:21

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ICICIdirect.com's report on Tata MotorsTata Motors’ (TML) Q1FY16 results were below our estimates. Consolidated revenues came in at Rs 61,020 crore (down 5.7% YoY, 9.7% QoQ), below our estimates of Rs 63,889. Net revenues of JLR were at £5002 million (down 6.6% YoY, 8.1% QoQ) vs. our estimate of £5117 million on account of a decline in ASPs that can be attributed to a poor product/geography mixConsolidated EBITDA margins were at 16.1% (down 207 bps YoY, up 446 bps QoQ) vs. our estimate of 14.5%. Reported EBITDA margins of JLR came in at 16.4% (down 389 bps YoY, 103 bps QoQ) vs. our expectation of 15.8%. However, the EBITDA includes £62 million local incentive. Post adjustment, actual margins would be 15.5%. The standalone business continued to report positive margin (of 4.7%) for a second consecutive quarter against our estimates of 2%The reported consolidated PAT was at Rs 2,769 crore, lower than estimates of Rs 3136 crore. JLR’s reported net profit at £492 million (down 29% YoY, up 62.9% QoQ) was above our estimate of £344 million. However, post adjustment of MTM forex gain, net profit was at £343 million. Standalone PAT came in at Rs 275 crore, higher than our estimate of loss of Rs 574 crore"We remain positive on sustained earnings growth for the JLR business as the product pipeline grows and market share increases across geographies. We value the stock on an SOTP basis, with JLR at 3.4x EV/EBIDTA basis contributing ~Rs 388/share while the domestic business contributes Rs 49/share. Inclusive of other subsidiaries and China JV, we arrive at a target price to Rs 480. Buy the stock", says ICICIdirect.com research report.For all recommendations, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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