JLR's China focus only reason to own Tata Motors: HDFC Sec

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26 Aug, 2025 12:21

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Moneycontrol BureauThe brokerage house may have gone wrong with its previous call on auto maker Tata Motors, but Dipen Sheth of HDFC Securities says they now have a strong buy on the stock.

While the company is facing a big challenge in terms of its China sales, Sheth believes the company has other things working for it like its product quality and brand portfolio.

In June Jaguar Land Rover (JLR) retailed 39,602 vehicles. While the volumes were led by double-digit growth in the Western markets, it was offset by the weakening environment in China and delays in production ramp up for the locally produced Range Rover Evoque.

He says, " The market share that they have in China is so low (single digit) that they just can’t get it wrong consistently for too long in the world’s largest car market."

So, will it be a top gainer stock soon? Not, soon, cautions Sheth. He believes the stock can go wrong from a two-three month perspective, but not from a two year perspective.

While a lot of Indian traders have started advising offloading the auto maker, other brokerage firms are corroborating Sheth's bullish stance.

JP Morgan has an overweight on the stock as it believes the management's moves to revive Chinese sales - cutting prices of Evoque and refreshing product lineups- will reap good benefits.

Barclays too has an overweight stance on the stock while lowering JLR's EBITDA estimates. The brokerage firm believes the risk-reward is favourable and has a revised target of Rs 590.

While CLSA has downgraded its target price by 15 percent to Rs 481, it still marks a 22 percent upside. The brokerage has a buy on the stock as it expects JLR to grow faster than the industry in China with relatively better pricing resilience even as luxury-auto sales slowdown.