Hold Tata Motors; target of Rs 733: Prabhudas Lilladher

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26 Aug, 2025 12:21

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TTMT’s consolidated revenue for Q3FY25 grew by 2.7% YoY, missing consensus/PL estimates by 2.6%/1.5%. The subdued growth in revenue was attributable to CV and PV units reporting a respective decline of 8.7%/4.3% in their revenue, while JLR business revenue (in GBP) was merely up by 1.5% YoY. EBITDA declined by 15% YoY while margin contracted by 239bps YoY to 11.5%, mainly due to subdued wholesale and higher VME at the JLR unit. Weak overall performance impacted its PAT as it de-grew by 21.9% YoY. Despite weak operational performance specifically in the JLR business, the management remains optimistic on delivering EBIT margin of ≥8.5% EBIT and 10% in FY26. In terms of CV and PV business, near term challenges shall impact its volume growth, however, remains optimistic on long term growth outlook to drive growth.

Additionally, increased competitive intensity in EV traction shall impact their EV PV business. CV business could benefit from capex revival and CV upcycle from FY26. Based on this we maintain our “Hold” rating with SoTP-based target price of Rs733 (previous Rs784).

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